Constitutional Provisions:

Article 8: Sections 1, 2, 4, 5Article 10: Sections 1, 2, 7, 10,11Article 12

ALFRED FRITZ FRENZEL, petitioner, vs. EDERLINA P. CATITO, respondent.

D E C I S I O N

CALLEJO, SR., J.:

Before us is a petition for review of the Decision[1] of the Court of Appeals in CA-G.R. CV No. 53485 which affirmed the Decision[2] of the Regional Trial Court of Davao City, Branch 14, in Civil Case No. 17,817 dismissing the petitioners complaint, and the resolution of the Court of Appeals denying his motion for reconsideration of the said decision.

The Antecedents [3]

As gleaned from the evidence of the petitioner, the case at bar stemmed from the following factual backdrop:

Petitioner Alfred Fritz Frenzel is an Australian citizen of German descent. He is an electrical engineer by profession, but worked as a pilot with the New Guinea Airlines. He arrived in the Philippines in 1974, started engaging in business in the country two years thereafter, and married Teresita Santos, a Filipino citizen. In 1981, Alfred and Teresita separated from bed and board without obtaining a divorce.

Sometime in February 1983, Alfred arrived in Sydney, Australia for a vacation. He went to Kings Cross, a night spot in Sydney, for a massage where he met Ederlina Catito, a Filipina and a native of Bajada, Davao City. Unknown to Alfred, she resided for a time in Germany and was married to Klaus Muller, a German national. She left Germany and tried her luck in Sydney, Australia, where she found employment as a masseuse in the Kings Cross nightclub. She was fluent in German, and Alfred enjoyed talking with her. The two saw each other again; this time Ederlina ended up staying in Alfreds hotel for three days. Alfred gave Ederlina sums of money for her services.[4]

Alfred was so enamored with Ederlina that he persuaded her to stop working at Kings Cross, return to the Philippines, and engage in a wholesome business of her own. He also proposed that they meet in Manila, to which she assented. Alfred gave her money for her plane fare to the Philippines. Within two weeks of Ederlinas arrival in Manila, Alfred joined her. Alfred reiterated his proposal for Ederlina to stay in the Philippines and engage in business, even offering to finance her business venture. Ederlina was delighted at the idea and proposed to put up a beauty parlor. Alfred happily agreed.

Alfred told Ederlina that he was married but that he was eager to divorce his wife in Australia. Alfred proposed marriage to Ederlina, but she replied that they should wait a little bit longer.

Ederlina found a building at No. 444 M.H. del Pilar corner Arquiza Street, Ermita, Manila, owned by one Atty. Jose Hidalgo who offered to convey his rights over the property for P18,000.00. Alfred and Ederlina accepted the offer. Ederlina put up a beauty parlor on the property under the business name Edorial Beauty Salon, and had it registered with the Department of Trade and Industry under her name. Alfred paid Atty. Hidalgo P20,000.00 for his right over the property and gave P300,000.00 to Ederlina for the purchase of equipment and furnitures for the parlor. As Ederlina was going to Germany, she executed a special power of attorney on December 13, 1983[5] appointing her brother, Aser Catito, as her attorney-in-fact in managing the beauty parlor business. She stated in the said deed that she was married to Klaus Muller. Alfred went back to Papua New Guinea to resume his work as a pilot.

When Alfred returned to the Philippines, he visited Ederlina in her Manila residence and found it unsuitable for her. He decided to purchase a house and lot owned by Victoria Binuya Steckel in San Francisco del Monte, Quezon City, covered by Transfer Certificate of Title No. 218429 for US$20,000.00. Since Alfred knew that as an alien he was disqualified from owning lands in the Philippines, he agreed that only Ederlinas name would appear in the deed of sale as the buyer of the property, as well as in the title covering the same. After all, he was planning to marry Ederlina and he believed that after their marriage, the two of them would jointly own the property. On January 23, 1984, a Contract to Sell was entered into between Victoria Binuya Steckel as the vendor and Ederlina as the sole vendee. Alfred signed therein as a witness.[6] Victoria received from Alfred, for and in behalf of Ederlina, the amount of US$10,000.00 as partial payment, for which Victoria issued a receipt.[7] When Victoria executed the deed of absolute sale over the property on March 6, 1984,[8] she received from Alfred, for and in behalf of Ederlina, the amount of US$10,000.00 as final and full payment. Victoria likewise issued a receipt for the said amount.[9] After Victoria had vacated the property, Ederlina moved into her new house. When she left for Germany to visit Klaus, she had her father Narciso Catito and her two sisters occupy the property.

Alfred decided to stay in the Philippines for good and live with Ederlina. He returned to Australia and sold his fiber glass pleasure boat to John Reid for $7,500.00 on May 4, 1984.[10] He also sold his television and video business in Papua New Guinea for K135,000.00 to Tekeraoi Pty. Ltd.[11] He had his personal properties shipped to the Philippines and stored at No. 14 Fernandez Street, San Francisco del Monte, Quezon City. The proceeds of the sale were deposited in Alfreds account with the Hong Kong Shanghai Banking Corporation (HSBC), Kowloon Branch under Bank Account No. 018-2-807016.[12] When Alfred was in Papua New Guinea selling his other properties, the bank sent telegraphic letters updating him of his account.[13] Several checks were credited to his HSBC bank account from Papua New Guinea Banking Corporation, Westpac Bank of Australia and New Zealand Banking Group Limited and Westpac BankPNG-Limited. Alfred also had a peso savings account with HSBC, Manila, under Savings Account No. 01-725-183-01.[14]

Once, when Alfred and Ederlina were in Hong Kong, they opened another account with HSBC, Kowloon, this time in the name of Ederlina, under Savings Account No. 018-0-807950.[15] Alfred transferred his deposits in Savings Account No. 018-2-807016 with the said bank to this new account. Ederlina also opened a savings account with the Bank of America Kowloon Main Office under Account No. 30069016.[16]

On July 28, 1984, while Alfred was in Papua New Guinea, he received a Letter dated December 7, 1983 from Klaus Muller who was then residing in Berlin, Germany. Klaus informed Alfred that he and Ederlina had been married on October 16, 1978 and had a blissful married life until Alfred intruded therein. Klaus stated that he knew of Alfred and Ederlinas amorous relationship, and discovered the same sometime in November 1983 when he arrived in Manila. He also begged Alfred to leave Ederlina alone and to return her to him, saying that Alfred could not possibly build his future on his (Klaus) misfortune.[17]

Alfred had occasion to talk to Sally MacCarron, a close friend of Ederlina. He inquired if there was any truth to Klaus statements and Sally confirmed that Klaus was married to Ederlina. When Alfred confronted Ederlina, she admitted that she and Klaus were, indeed, married. But she assured Alfred that she would divorce Klaus. Alfred was appeased. He agreed to continue the amorous relationship and wait for the outcome of Ederlinas petition for divorce. After all, he intended to marry her. He retained the services of Rechtsanwltin Banzhaf with offices in Berlin, as her counsel who informed her of the progress of the proceedings.[18] Alfred paid for the services of the lawyer.

In the meantime, Alfred decided to purchase another house and lot, owned by Rodolfo Morelos covered by TCT No. 92456 located in Pea Street, Bajada, Davao City.[19] Alfred again agreed to have the deed of sale made out in the name of Ederlina. On September 7, 1984, Rodolfo Morelos executed a deed of absolute sale over the said property in favor of Ederlina as the sole vendee for the amount ofP80,000.00.[20] Alfred paid US$12,500.00 for the property.

Alfred purchased another parcel of land from one Atty. Mardoecheo Camporedondo, located in Moncado, Babak, Davao, covered by TCT No. 35251. Alfred once more agreed for the name of Ederlina to appear as the sole vendee in the deed of sale. On December 31, 1984, Atty. Camporedondo executed a deed of sale over the property for P65,000.00 in favor of Ederlina as the sole vendee.[21] Alfred, through Ederlina, paid the lot at the cost of P33,682.00 and US$7,000.00, respectively, for which the vendor signed receipts.[22] On August14, 1985, TCT No. 47246 was issued to Ederlina as the sole owner of the said property.[23]

Meanwhile, Ederlina deposited on December 27, 1985, the total amount of US$250,000 with the HSBC Kowloon under Joint Deposit Account No. 018-462341-145.[24]

The couple decided to put up a beach resort on a four-hectare land in Camudmud, Babak, Davao, owned by spouses Enrique and Rosela Serrano. Alfred purchased the property from the spouses for P90,000.00, and the latter issued a receipt therefor.[25] A draftsman commissioned by the couple submitted a sketch of the beach resort.[26] Beach houses were forthwith constructed on a portion of the property and were eventually rented out by Ederlinas father, Narciso Catito. The rentals were collected by Narciso, while Ederlina kept the proceeds of the sale of copra from the coconut trees in the property. By this time, Alfred had already spent P200,000.00 for the purchase, construction and upkeep of the property.

Ederlina often wrote letters to her family informing them of her life with Alfred. In a Letter dated January 21, 1985, she wrote about how Alfred had financed the purchases of some real properties, the establishment of her beauty parlor business, and her petition to divorce Klaus.[27]

Because Ederlina was preoccupied with her business in Manila, she executed on July 8, 1985, two special powers of attorney[28]appointing Alfred as attorney-in-fact to receive in her behalf the title and the deed of sale over the property sold by the spouses Enrique Serrano.

In the meantime, Ederlinas petition for divorce was denied because Klaus opposed the same. A second petition filed by her met the same fate. Klaus wanted half of all the properties owned by Ederlina in the Philippines before he would agree to a divorce. Worse, Klaus threatened to file a bigamy case against Ederlina.[29]

Alfred proposed the creation of a partnership to Ederlina, or as an alternative, the establishment of a corporation, with Ederlina owning 30% of the equity thereof. She initially agreed to put up a corporation and contacted Atty. Armando Dominguez to prepare the necessary documents. Ederlina changed her mind at the last minute when she was advised to insist on claiming ownership over the properties acquired by them during their coverture.

Alfred and Ederlinas relationship started deteriorating. Ederlina had not been able to secure a divorce from Klaus. The latter could charge her for bigamy and could even involve Alfred, who himself was still married. To avoid complications, Alfred decided to live separately from Ederlina and cut off all contacts with her. In one of her letters to Alfred, Ederlina complained that he had ruined her life. She admitted that the money used for the purchase of the properties in Davao were his. She offered to convey the properties deeded to her by Atty. Mardoecheo Camporedondo and Rodolfo Morelos, asking Alfred to prepare her affidavit for the said purpose and send it to her for her signature.[30] The last straw for Alfred came on September 2, 1985, when someone smashed the front and rear windshields of Alfreds car and damaged the windows. Alfred thereafter executed an affidavit-complaint charging Ederlina and Sally MacCarron with malicious mischief.[31]

On October 15, 1985, Alfred wrote to Ederlinas father, complaining that Ederlina had taken all his life savings and because of this, he was virtually penniless. He further accused the Catito family of acquiring for themselves the properties he had purchased with his own money. He demanded the return of all the amounts that Ederlina and her family had stolen and turn over all the properties acquired by him and Ederlina during their coverture.[32]

Shortly thereafter, Alfred filed a Complaint[33] dated October 28, 1985, against Ederlina, with the Regional Trial Court of Quezon City, for recovery of real and personal properties located in Quezon City and Manila. In his complaint, Alfred alleged, inter alia, that Ederlina, without his knowledge and consent, managed to transfer funds from their joint account in HSBC Hong Kong, to her own account with the same bank. Using the said funds, Ederlina was able to purchase the properties subject of the complaints. He also alleged that the beauty parlor in Ermita was established with his own funds, and that the Quezon City property was likewise acquired by him with his personal funds.[34]

Ederlina failed to file her answer and was declared in default. Alfred adduced his evidence ex-parte.

In the meantime, on November 7, 1985, Alfred also filed a complaint[35] against Ederlina with the Regional Trial Court, Davao City, for specific performance, declaration of ownership of real and personal properties, sum of money, and damages. He alleged, inter alia, in his complaint:

4. That during the period of their common-law relationship, plaintiff solely through his own efforts and resources acquired in the Philippines real and personal properties valued more or less at P724,000.00; The defendants common-law wife or live-in partner did not contribute anything financially to the acquisition of the said real and personal properties. These properties are as follows:

I. Real Properties

a. TCT No. T-92456 located at Bajada, Davao City, consisting of 286 square meters, (with residential house) registered in the name of the original title owner Rodolfo M. Morelos but already fully paid by plaintiff. Valued at P342,000.00;

b. TCT No. T-47246 (with residential house) located at Babak, Samal, Davao, consisting of 600 square meters, registered in the name of Ederlina Catito, with the Register of Deeds of Tagum, Davao del Norte valued at P144,000.00;

c. A parcel of agricultural land located at Camudmud, Babak, Samal, Davao del Norte, consisting of 4.2936 hectares purchased from Enrique Serrano and Rosela B. Serrano. Already paid in full by plaintiff. Valued at P228,608.32;

II. Personal Properties:

a. Furniture valued at P10,000.00.

. . .5. That defendant made no contribution at all to the acquisition of the above-mentioned properties as all the monies (sic) used in acquiring said properties belonged solely to plaintiff;[36]

Alfred prayed that after hearing, judgment be rendered in his favor:

WHEREFORE, in view of the foregoing premises, it is respectfully prayed that judgment be rendered in favor of plaintiff and against defendant:

a) Ordering the defendant to execute the corresponding deeds of transfer and/or conveyances in favor of plaintiff over those real and personal properties enumerated in Paragraph 4 of this complaint;

b) Ordering the defendant to deliver to the plaintiff all the above real and personal properties or their money value, which are in defendants name and custody because these were acquired solely with plaintiffs money and resources during the duration of the common-law relationship between plaintiff and defendant, the description of which are as follows:

(1) TCT No. T-92456 (with residential house) located at Bajada, Davao City, consisting of 286 square meters, registered in the name of the original title owner Rodolfo Morelos but already fully paid by plaintiff. Valued at P342,000.00;

(2) TCT No. T-47246 (with residential house) located at Babak, Samal, Davao, consisting of 600 square meters, registered in the name of Ederlina Catito, with the Register of Deeds of Tagum, Davao del Norte, valued at P144,000.00;

(3) A parcel of agricultural land located at Camudmud, Babak, Samal, Davao del Norte, consisting of 4.2936 hectares purchased from Enrique Serrano and Rosela B. Serrano. Already fully paid by plaintiff. Valued at P228,608.32;

c) Declaring the plaintiff to be the sole and absolute owner of the above-mentioned real and personal properties;

d) Awarding moral damages to plaintiff in an amount deemed reasonable by the trial court;

e) To reimburse plaintiff the sum of P12,000.00 as attorneys fees for having compelled the plaintiff to litigate;

f) To reimburse plaintiff the sum of P5,000.00 incurred as litigation expenses also for having compelled the plaintiff to litigate; and

g) To pay the costs of this suit;Plaintiff prays for other reliefs just and equitable in the premises.[37]

In her answer, Ederlina denied all the material allegations in the complaint, insisting that she acquired the said properties with her personal funds, and as such, Alfred had no right to the same. She alleged that the deeds of sale, the receipts, and certificates of titles of the subject properties were all made out in her name.[38] By way of special and affirmative defense, she alleged that Alfred had no cause of action against her. She interposed counterclaims against the petitioner.[39]

In the meantime, the petitioner filed a Complaint dated August 25, 1987, against the HSBC in the Regional Trial Court of Davao City[40]for recovery of bank deposits and damages.[41] He prayed that after due proceedings, judgment be rendered in his favor, thus:WHEREFORE, plaintiff respectfully prays that the Honorable Court adjudge defendant bank, upon hearing the evidence that the parties might present, to pay plaintiff:1. ONE HUNDRED TWENTY SIX THOUSAND TWO HUNDRED AND THIRTY U.S. DOLLARS AND NINETY EIGHT CENTS (US$126,230.98) plus legal interests, either of Hong Kong or of the Philippines, from 20 December 1984 up to the date of execution or satisfaction of judgment, as actual damages or in restoration of plaintiffs lost dollar savings;2.The same amount in (1) above as moral damages;3. Attorneys fees in the amount equivalent to TWENTY FIVE PER CENT (25%) of (1) and (2) above;

4. Litigation expenses in the amount equivalent to TEN PER CENT (10%) of the amount in (1) above; and5. For such other reliefs as are just and equitable under the circumstances.[42]

On April 28, 1986, the RTC of Quezon City rendered its decision in Civil Case No. Q-46350, in favor of Alfred, the decretal portion of which reads as follows:

WHEREFORE, premises considered, judgment is hereby rendered ordering the defendant to perform the following:(1) To execute a document waiving her claim to the house and lot in No. 14 Fernandez St., San Francisco Del Monte, Quezon City in favor of plaintiff or to return to the plaintiff the acquisition cost of the same in the amount of $20,000.00, or to sell the said property and turn over the proceeds thereof to the plaintiff;(2) To deliver to the plaintiff the rights of ownership and management of the beauty parlor located at 444 Arquiza St., Ermita, Manila, including the equipment and fixtures therein;(3) To account for the earnings of rental of the house and lot in No. 14 Fernandez St., San Francisco Del Monte, Quezon City, as well as the earnings in the beauty parlor at 444 Arquiza St., Ermita, Manila and turn over one-half of the net earnings of both properties to the plaintiff;(4) To surrender or return to the plaintiff the personal properties of the latter left in the house at San Francisco Del Monte, to wit:(1) Mamya automatic camera(1) 12 inch Sonny T.V. set, colored with remote control.(1) Micro oven(1) Electric fan (tall, adjustable stand)(1) Office safe with (2) drawers and safe(1) Electric Washing Machine(1) Office desk and chair(1) Double bed suits(1) Mirror/dresser(1) Heavy duty voice/working mechanic(1) Sony Beta-Movie camera(1) Suitcase with personal belongings(1) Cardboard box with belongings(1) Guitar Amplifier(1) Hanger with mens suit (white).To return to the plaintiff, (1) Hi-Fi Stereo equipment left at 444 Arquiza Street, Ermita, Manila, as well as the Fronte Suzuki car.

(4) To account for the monies (sic) deposited with the joint account of the plaintiff and defendant (Account No. 018-0-807950); and to restore to the plaintiff all the monies (sic) spent by the defendant without proper authority;(5) To pay the amount of P5,000.00 by way of attorneys fees, and the costs of suit.SO ORDERED.[43]

However, after due proceedings in the RTC of Davao City, in Civil Case No. 17,817, the trial court rendered judgment on September 28, 1995 in favor of Ederlina, the dispositive portion of which reads:WHEREFORE, the Court cannot give due course to the complaint and hereby orders its dismissal. The counterclaims of the defendant are likewise dismissed.SO ORDERED.[44]

The trial court ruled that based on documentary evidence, the purchaser of the three parcels of land subject of the complaint was Ederlina. The court further stated that even if Alfred was the buyer of the properties, he had no cause of action against Ederlina for the recovery of the same because as an alien, he was disqualified from acquiring and owning lands in the Philippines. The sale of the three parcels of land to the petitioner was null and void ab initio. Applying the pari delicto doctrine, the petitioner was precluded from recovering the properties from the respondent.

Alfred appealed the decision to the Court of Appeals[45] in which the petitioner posited the view that although he prayed in his complaint in the court a quo that he be declared the owner of the three parcels of land, he had no intention of owning the same permanently. His principal intention therein was to be declared the transient owner for the purpose of selling the properties at public auction, ultimately enabling him to recover the money he had spent for the purchase thereof.

On March 8, 2000, the CA rendered a decision affirming in toto the decision of the RTC. The appellate court ruled that the petitioner knowingly violated the Constitution; hence, was barred from recovering the money used in the purchase of the three parcels of land. It held that to allow the petitioner to recover the money used for the purchase of the properties would embolden aliens to violate the Constitution, and defeat, rather than enhance, the public policy.[46]

Hence, the petition at bar.

The petitioner assails the decision of the court contending that:THE HONORABLE COURT OF APPEALS ERRED IN APPLYING THE RULE OF IN PARI DELICTO IN THE INSTANT CASE BECAUSE BY THE FACTS AS NARRATED IN THE DECISION IT IS APPARENT THAT THE PARTIES ARE NOT EQUALLY GUILTY BUT RATHER IT WAS THE RESPONDENT WHO EMPLOYED FRAUD AS WHEN SHE DID NOT INFORM PETITIONER THAT SHE WAS ALREADY MARRIED TO ANOTHER GERMAN NATIONAL AND WITHOUT SUCH FRAUDULENT DESIGN PETITIONER COULD NOT HAVE PARTED WITH HIS MONEY FOR THE PURCHASE OF THE PROPERTIES.[47]and

THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT THE INTENTION OF THE PETITIONER IS NOT TO OWN REAL PROPERTIES IN THE PHILIPPINES BUT TO SELL THEM AT PUBLIC AUCTION TO BE ABLE TO RECOVER HIS MONEY USED IN PURCHASING THEM.[48]

Since the assignment of errors are intertwined with each other, the Court shall resolve the same simultaneously.

The petitioner contends that he purchased the three parcels of land subject of his complaint because of his desire to marry the respondent, and not to violate the Philippine Constitution. He was, however, deceived by the respondent when the latter failed to disclose her previous marriage to Klaus Muller. It cannot, thus, be said that he and the respondent are equally guilty; as such, the pari delictodoctrine is not applicable to him. He acted in good faith, on the advice of the respondents uncle, Atty. Mardoecheo Camporedondo. There is no evidence on record that he was aware of the constitutional prohibition against aliens acquiring real property in the Philippines when he purchased the real properties subject of his complaint with his own funds. The transactions were not illegal per se but merely prohibited, and under Article 1416 of the New Civil Code, he is entitled to recover the money used for the purchase of the properties. At any rate, the petitioner avers, he filed his complaint in the court a quo merely for the purpose of having him declared as the owner of the properties, to enable him to sell the same at public auction. Applying by analogy Republic Act No. 133[49] as amended by Rep. Act No. 4381 and Rep. Act No. 4882, the proceeds of the sale would be remitted to him, by way of refund for the money he used to purchase the said properties. To bar the petitioner from recovering the subject properties, or at the very least, the money used for the purchase thereof, is to allow the respondent to enrich herself at the expense of the petitioner in violation of Article 22 of the New Civil Code.

The petition is bereft of merit.

Section 14, Article XIV of the 1973 Constitution provides, as follows:Save in cases of hereditary succession, no private land shall be transferred or conveyed except to individuals, corporations, or associations qualified to acquire or hold lands in the public domain.[50]

Lands of the public domain, which include private lands, may be transferred or conveyed only to individuals or entities qualified to acquire or hold private lands or lands of the public domain. Aliens, whether individuals or corporations, have been disqualified from acquiring lands of the public domain. Hence, they have also been disqualified from acquiring private lands.[51]

Even if, as claimed by the petitioner, the sales in question were entered into by him as the real vendee, the said transactions are in violation of the Constitution; hence, are null and void ab initio.[52] A contract that violates the Constitution and the law, is null and void and vests no rights and creates no obligations. It produces no legal effect at all.[53] The petitioner, being a party to an illegal contract, cannot come into a court of law and ask to have his illegal objective carried out. One who loses his money or property by knowingly engaging in a contract or transaction which involves his own moral turpitude may not maintain an action for his losses. To him who moves in deliberation and premeditation, the law is unyielding.[54] The law will not aid either party to an illegal contract or agreement; it leaves the parties where it finds them.[55] Under Article 1412 of the New Civil Code, the petitioner cannot have the subject properties deeded to him or allow him to recover the money he had spent for the purchase thereof.[56] Equity as a rule

will follow the law and will not permit that to be done indirectly which, because of public policy, cannot be done directly.[57] Where the wrong of one party equals that of the other, the defendant is in the stronger position ... it signifies that in such a situation, neither a court of equity nor a court of law will administer a remedy.[58] The rule is expressed in the maxims: EX DOLO MALO NON ORITUR ACTIO and IN PARI DELICTO POTIOR EST CONDITIO DEFENDENTIS.[59]

The petitioner cannot feign ignorance of the constitutional proscription, nor claim that he acted in good faith, let alone assert that he is less guilty than the respondent. The petitioner is charged with knowledge of the constitutional prohibition.[60] As can be gleaned from the decision of the trial court, the petitioner was fully aware that he was disqualified from acquiring and owning lands under Philippine law even before he purchased the properties in question; and, to skirt the constitutional prohibition, the petitioner had the deed of sale placed under the respondents name as the sole vendee thereof:Such being the case, the plaintiff is subject to the constitutional restrictions governing the acquisition of real properties in the Philippines by aliens.From the plaintiffs complaint before the Regional Trial Court, National Capital Judicial Region, Branch 84, Quezon City in Civil Case No. Q-46350 he alleged:xxx That on account that foreigners are not allowed by the Philippine laws to acquire real properties in their name as in the case of my vendor Miss Victoria Vinuya (sic) although married to a foreigner, we agreed and I consented in having the title to subject property placed in defendants name alone although I paid for the whole price out of my own exclusive funds. (paragraph IV, Exhibit W.)and his testimony before this Court which is hereby quoted:

ATTY. ABARQUEZ:

Q. In whose name the said house and lot placed, by the way, where is his house and lot located?

A. In 14 Fernandez St., San Francisco, del Monte, Manila.

Q. In whose name was the house placed?

A. Ederlina Catito because I was informed being not a Filipino, I cannot own the property. (tsn, p. 11, August 27, 1986).

xxx xxx xxx

COURT:

Q. So you understand that you are a foreigner that you cannot buy land in the Philippines?

A. That is correct but as she would eventually be my wife that would be owned by us later on. (tsn, p. 5, September 3, 1986)

xxx xxx xxx

Q. What happened after that?

A. She said you foreigner you are using Filipinos to buy property.

Q. And what did you answer?

A. I said thank you very much for the property I bought because I gave you a lot of money (tsn., p. 14, ibid).

It is evident that the plaintiff was fully aware that as a non-citizen of the Philippines, he was disqualified from validly purchasing any land within the country.[61]

The petitioners claim that he acquired the subject properties because of his desire to marry the respondent, believing that both of them would thereafter jointly own the said properties, is belied by his own evidence. It is merely an afterthought to salvage a lost cause. The petitioner admitted on cross-examination that he was all along legally married to Teresita Santos Frenzel, while he was having an amorous relationship with the respondent:

ATTY. YAP:

Q When you were asked to identify yourself on direct examination you claimed before this Honorable Court that your status is that of being married, do you confirm that?

A Yes, sir.

Q To whom are you married?

A To a Filipina, since 1976.

Q Would you tell us who is that particular person you are married since 1976?

A Teresita Santos Frenzel.

Q Where is she now?

A In Australia.

Q Is this not the person of Teresita Frenzel who became an Australian citizen?

A I am not sure, since 1981 we were separated.

Q You were only separated, in fact, but not legally separated?

A Thru my counsel in Australia I filed a separation case.

Q As of the present you are not legally divorce[d]?

A I am still legally married.[62]

The respondent was herself married to Klaus Muller, a German citizen. Thus, the petitioner and the respondent could not lawfully join in wedlock. The evidence on record shows that the petitioner in fact knew of the respondents marriage to another man, but nonetheless purchased the subject properties under the name of the respondent and paid the purchase prices therefor. Even if it is assumed gratia arguendi that the respondent and the petitioner were capacitated to marry, the petitioner is still disqualified to own the properties in tandem with the respondent.[63]

The petitioner cannot find solace in Article 1416 of the New Civil Code which reads:

Art. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced, recover what he has paid or delivered.[64]

The provision applies only to those contracts which are merely prohibited, in order to benefit private interests. It does not apply to contracts void ab initio. The sales of three parcels of land in favor of the petitioner who is a foreigner is illegal per se. The transactions are void ab initio because they were entered into in violation of the Constitution. Thus, to allow the petitioner to recover the properties or the money used in the purchase of the parcels of land would be subversive of public policy.

Neither may the petitioner find solace in Rep. Act No. 133, as amended by Rep. Act No. 4882, which reads:SEC. 1. Any provision of law to the contrary notwithstanding, private real property may be mortgaged in favor of any individual, corporation, or association, but the mortgagee or his successor-in- interest, if disqualified to acquire or hold lands of the public domain in the Philippines, shall not take possession of the mortgaged property during the existence of the mortgage and shall not take possession of mortgaged property except after default and for the sole purpose of foreclosure, receivership, enforcement or other proceedings and in no case for a period of more than five years from actual possession and shall not bid or take part in any sale of such real property in case of foreclosure: Provided, That said mortgagee or successor-in-interest may take possession of said property after default in accordance with the prescribed judicial procedures for foreclosure and receivership and in no case exceeding five years from actual possession.[65]

From the evidence on record, the three parcels of land subject of the complaint were not mortgaged to the petitioner by the owners thereof but were sold to the respondent as the vendee, albeit with the use of the petitioners personal funds.

Futile, too, is petitioners reliance on Article 22 of the New Civil Code which reads:

Art. 22. Every person who through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him.[66]

The provision is expressed in the maxim: MEMO CUM ALTERIUS DETER DETREMENTO PROTEST (No person should unjustly enrich himself at the expense of another). An action for recovery of what has been paid without just cause has been designated as an accion in rem verso.[67] This provision does not apply if, as in this case, the action is proscribed by the Constitution or by the application of the pari delictodoctrine.[68] It may be unfair and unjust to bar the petitioner

from filing an accion in rem verso over the subject properties, or from recovering the money he paid for the said properties, but, as Lord Mansfield stated in the early case of Holman vs. Johnson:[69] The objection that a contract is immoral or illegal as between the plaintiff and the defendant, sounds at all times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever allowed; but it is founded in general principles of policy, which the defendant has the advantage of, contrary to the real justice, as between him and the plaintiff.

IN LIGHT OF ALL THE FOREGOING, the petition is DISMISSED. The decision of the Court of Appeals is AFFIRMED in toto.

Costs against the petitioner.

SO ORDERED.

FRANCISCO I. CHAVEZ, petitioner, vs. PUBLIC ESTATES AUTHORITY and AMARI COASTAL BAY DEVELOPMENT CORPORATION,respondents.

D E C I S I O N

CARPIO, J.:

This is an original Petition for Mandamus with prayer for a writ of preliminary injunction and a temporary restraining order. The petition seeks to compel the Public Estates Authority (PEA for brevity) to disclose all facts on PEAs then on-going renegotiations with Amari Coastal Bay and Development Corporation (AMARI for brevity) to reclaim portions of Manila Bay. The petition further seeks to enjoin PEA from signing a new agreement with AMARI involving such reclamation.

The Facts

On November 20, 1973, the government, through the Commissioner of Public Highways, signed a contract with the Construction and Development Corporation of the Philippines (CDCP for brevity) to reclaim certain foreshore and offshore areas of Manila Bay. The contract also included the construction of Phases I and II of the Manila-Cavite Coastal Road. CDCP obligated itself to carry out all the works in consideration of fifty percent of the total reclaimed land.

On February 4, 1977, then President Ferdinand E. Marcos issued Presidential Decree No. 1084 creating PEA. PD No. 1084 tasked PEA to reclaim land, including foreshore and submerged areas, and to develop, improve, acquire, x x x lease and sell any and all kinds of lands.[1] On the same date, then President Marcos issued Presidential Decree No. 1085 transferring to PEA the lands reclaimed in the foreshore and offshore of the Manila Bay[2] under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP).

On December 29, 1981, then President Marcos issued a memorandum directing PEA to amend its contract with CDCP, so that [A]ll future works in MCCRRP x x x shall be funded and owned by PEA. Accordingly, PEA and CDCP executed a Memorandum of Agreement dated December 29, 1981, which stated:

(i) CDCP shall undertake all reclamation, construction, and such other works in the MCCRRP as may be agreed upon by the parties, to be paid according to progress of works on a unit price/lump sum basis for items of work to be agreed upon, subject to price escalation, retention and other terms and conditions provided for in Presidential Decree No. 1594. All the financing required for such works shall be provided by PEA.x x x(iii) x x x CDCP shall give up all its development rights and hereby agrees to cede and transfer in favor of PEA, all of the rights, title, interest and participation of CDCP in and to all the areas of land reclaimed by CDCP in the MCCRRP as of December 30, 1981 which have not yet been sold, transferred or otherwise disposed of by CDCP as of said date, which areas consist of approximately Ninety-Nine Thousand Four Hundred Seventy Three (99,473) square meters in the Financial Center

Area covered by land pledge No. 5 and approximately Three Million Three Hundred Eighty Two Thousand Eight Hundred Eighty Eight (3,382,888) square meters of reclaimed areas at varying elevations above Mean Low Water Level located outside the Financial Center Area and the First Neighborhood Unit.[3]

On January 19, 1988, then President Corazon C. Aquino issued Special Patent No. 3517, granting and transferring to PEA the parcels of land so reclaimed under the Manila-Cavite Coastal Road and Reclamation Project (MCCRRP) containing a total area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters. Subsequently, on April 9, 1988, the Register of Deeds of the Municipality of Paraaque issued Transfer Certificates of Title Nos. 7309, 7311, and 7312, in the name of PEA, covering the three reclaimed islands known as the Freedom Islands located at the southern portion of the Manila-Cavite Coastal Road, Paraaque City. The Freedom Islands have a total land area of One Million Five Hundred Seventy Eight Thousand Four Hundred and Forty One (1,578,441) square meters or 157.841 hectares.

On April 25, 1995, PEA entered into a Joint Venture Agreement (JVA for brevity) with AMARI, a private corporation, to develop the Freedom Islands. The JVA also required the reclamation of an additional 250 hectares of submerged areas surrounding these islands to complete the configuration in the Master Development Plan of the Southern Reclamation Project-MCCRRP. PEA and AMARI entered into the JVA through negotiation without public bidding.[4] On April 28, 1995, the Board of Directors of PEA, in its Resolution No. 1245, confirmed the JVA. [5] On June 8, 1995, then President Fidel V. Ramos, through then Executive Secretary Ruben Torres, approved the JVA.[6]

On November 29, 1996, then Senate President Ernesto Maceda delivered a privilege speech in the Senate and denounced the JVA as the grandmother of all scams. As a result, the Senate Committee on Government Corporations and Public Enterprises, and the Committee on Accountability of Public Officers and Investigations, conducted a joint investigation. The Senate Committees reported the results of their investigation in Senate Committee Report No. 560 dated September 16, 1997.[7] Among the conclusions of their report are: (1) the reclaimed lands PEA seeks to transfer to AMARI under the JVA are lands of the public domain which the government has not classified as alienable lands and therefore PEA cannot alienate these lands; (2) the certificates of title covering the Freedom Islands are thus void, and (3) the JVA itself is illegal.

On December 5, 1997, then President Fidel V. Ramos issued Presidential Administrative Order No. 365 creating a Legal Task Force to conduct a study on the legality of the JVA in view of Senate Committee Report No. 560. The members of the Legal Task Force were the Secretary of Justice,[8] the Chief Presidential Legal Counsel,[9] and the Government Corporate Counsel.[10] The Legal Task Force upheld the legality of the JVA, contrary to the conclusions reached by the Senate Committees.[11]

On April 4 and 5, 1998, the Philippine Daily Inquirer and Today published reports that there were on-going renegotiations between PEA and AMARI under an order issued by then President Fidel V. Ramos. According to these reports, PEA Director Nestor Kalaw, PEA Chairman Arsenio Yulo and retired Navy Officer Sergio Cruz composed the negotiating panel of PEA.

On April 13, 1998, Antonio M. Zulueta filed before the Court a Petition for Prohibition with Application for the Issuance of a Temporary Restraining Order and Preliminary Injunction docketed

as G.R. No. 132994 seeking to nullify the JVA. The Court dismissed the petition for unwarranted disregard of judicial hierarchy, without prejudice to the refiling of the case before the proper court.[12]

On April 27, 1998, petitioner Frank I. Chavez (Petitioner for brevity) as a taxpayer, filed the instant Petition for Mandamus with Prayer for the Issuance of a Writ of Preliminary Injunction and Temporary Restraining Order. Petitioner contends the government stands to lose billions of pesos in the sale by PEA of the reclaimed lands to AMARI. Petitioner prays that PEA publicly disclose the terms of any renegotiation of the JVA, invoking Section 28, Article II, and Section 7, Article III, of the 1987 Constitution on the right of the people to information on matters of public concern. Petitioner assails the sale to AMARI of lands of the public domain as a blatant violation of Section 3, Article XII of the 1987 Constitution prohibiting the sale of alienable lands of the public domain to private corporations. Finally, petitioner asserts that he seeks to enjoin the loss of billions of pesos in properties of the State that are of public dominion.

After several motions for extension of time,[13] PEA and AMARI filed their Comments on October 19, 1998 and June 25, 1998, respectively. Meanwhile, on December 28, 1998, petitioner filed an Omnibus Motion: (a) to require PEA to submit the terms of the renegotiated PEA-AMARI contract; (b) for issuance of a temporary restraining order; and (c) to set the case for hearing on oral argument.Petitioner filed a Reiterative Motion for Issuance of a TRO dated May 26, 1999, which the Court denied in a Resolution dated June 22, 1999.

In a Resolution dated March 23, 1999, the Court gave due course to the petition and required the parties to file their respective memoranda.

On March 30, 1999, PEA and AMARI signed the Amended Joint Venture Agreement (Amended JVA, for brevity). On May 28, 1999, the Office of the President under the administration of then President Joseph E. Estrada approved the Amended JVA.

Due to the approval of the Amended JVA by the Office of the President, petitioner now prays that on constitutional and statutory grounds the renegotiated contract be declared null and void.[14]

The Issues

The issues raised by petitioner, PEA[15] and AMARI[16] are as follows:

I. WHETHER THE PRINCIPAL RELIEFS PRAYED FOR IN THE PETITION ARE MOOT AND ACADEMIC BECAUSE OF SUBSEQUENT EVENTS;

II. WHETHER THE PETITION MERITS DISMISSAL FOR FAILING TO OBSERVE THE PRINCIPLE GOVERNING THE HIERARCHY OF COURTS;

III. WHETHER THE PETITION MERITS DISMISSAL FOR NON-EXHAUSTION OF ADMINISTRATIVE REMEDIES;

IV. WHETHER PETITIONER HAS LOCUS STANDI TO BRING THIS SUIT;

V. WHETHER THE CONSTITUTIONAL RIGHT TO INFORMATION INCLUDES OFFICIAL INFORMATION ON ON-GOING NEGOTIATIONS BEFORE A FINAL AGREEMENT;

VI. WHETHER THE STIPULATIONS IN THE AMENDED JOINT VENTURE AGREEMENT FOR THE TRANSFER TO AMARI OF CERTAIN LANDS, RECLAIMED AND STILL TO BE RECLAIMED, VIOLATE THE 1987 CONSTITUTION; AND

VII. WHETHER THE COURT IS THE PROPER FORUM FOR RAISING THE ISSUE OF WHETHER THE AMENDED JOINT VENTURE AGREEMENT IS GROSSLY DISADVANTAGEOUS TO THE GOVERNMENT.

The Courts Ruling

First issue: whether the principal reliefs prayed for in the petition are moot and academic because of subsequent events.

The petition prays that PEA publicly disclose the terms and conditions of the on-going negotiations for a new agreement. The petition also prays that the Court enjoin PEA from privately entering into, perfecting and/or executing any new agreement with AMARI.

PEA and AMARI claim the petition is now moot and academic because AMARI furnished petitioner on June 21, 1999 a copy of the signed Amended JVA containing the terms and conditions agreed upon in the renegotiations. Thus, PEA has satisfied petitioners prayer for a public disclosure of the renegotiations. Likewise, petitioners prayer to enjoin the signing of the Amended JVA is now moot because PEA and AMARI have already signed the Amended JVA on March 30, 1999. Moreover, the Office of the President has approved the Amended JVA on May 28, 1999.

Petitioner counters that PEA and AMARI cannot avoid the constitutional issue by simply fast-tracking the signing and approval of the Amended JVA before the Court could act on the issue. Presidential approval does not resolve the constitutional issue or remove it from the ambit of judicial review.

We rule that the signing of the Amended JVA by PEA and AMARI and its approval by the President cannot operate to moot the petition and divest the Court of its jurisdiction. PEA and AMARI have still to implement the Amended JVA. The prayer to enjoin the signing of the Amended JVA on constitutional grounds necessarily includes preventing its implementation if in the meantime PEA and AMARI have signed one in violation of the Constitution. Petitioners principal basis in assailing the renegotiation of the JVA is its violation of Section 3, Article XII of the Constitution, which prohibits the government from alienating lands of the public domain to private corporations. If the Amended JVA indeed violates the Constitution, it is the duty of the Court to enjoin its implementation, and if already implemented, to annul the effects of such unconstitutional contract.

The Amended JVA is not an ordinary commercial contract but one which seeks to transfer title and ownership to 367.5 hectares of reclaimed lands and submerged areas of Manila Bay to a single private corporation. It now becomes more compelling for the Court to resolve the issue to insure the government itself does not violate a provision of the Constitution intended to safeguard the national patrimony. Supervening events, whether intended or accidental, cannot prevent the Court from rendering a decision if there is a grave violation of the Constitution. In the instant case, if the Amended JVA runs counter to the Constitution, the Court can still prevent the transfer of title and ownership of alienable lands of the public domain in the name of AMARI. Even in cases where supervening events had made the cases moot, the Court did not hesitate to resolve the legal or constitutional issues raised to formulate controlling principles to guide the bench, bar, and the public.[17]

Also, the instant petition is a case of first impression. All previous decisions of the Court involving Section 3, Article XII of the 1987 Constitution, or its counterpart provision in the 1973 Constitution,[18] covered agricultural lands sold to private corporations which acquired the lands from private parties. The transferors of the private corporations claimed or could claim the right to judicial confirmation of their imperfect titles[19] under Title II of Commonwealth Act. 141 (CA No. 141 for brevity). In the instant case, AMARI seeks to acquire from PEA, a public corporation, reclaimed lands and submerged areas for non-agricultural purposes by purchase under PD No. 1084 (charter of PEA) andTitle III of CA No. 141. Certain undertakings by AMARI under the Amended JVA constitute the consideration for the purchase. Neither AMARI nor PEA can claim judicial confirmation of their titles because the lands covered by the Amended JVA are newly reclaimed or still to be reclaimed. Judicial confirmation of imperfect title requires open, continuous, exclusive and notorious occupation of agricultural lands of the public domain for at least thirty years since June 12, 1945 or earlier. Besides, the deadline for filing applications for judicial confirmation of imperfect title expired on December 31, 1987.[20]

Lastly, there is a need to resolve immediately the constitutional issue raised in this petition because of the possible transfer at any time by PEA to AMARI of title and ownership to portions of the reclaimed lands. Under the Amended JVA, PEA is obligated to transfer to AMARI the latters seventy percent proportionate share in the reclaimed areas as the reclamation progresses. The Amended JVA even allows AMARI to mortgage at any time the entire reclaimed area to raise financing for the reclamation project.[21]

Second issue: whether the petition merits dismissal for failing to observe the principle governing the hierarchy of courts.

PEA and AMARI claim petitioner ignored the judicial hierarchy by seeking relief directly from the Court. The principle of hierarchy of courts applies generally to cases involving factual questions. As it is not a trier of facts, the Court cannot entertain cases involving factual issues. The instant case, however, raises constitutional issues of transcendental importance to the public.[22] The Court can resolve this case without determining any factual issue related to the case. Also, the instant case is a petition for mandamus which falls under the original jurisdiction of the Court under Section 5, Article VIII of the Constitution. We resolve to exercise primary jurisdiction over the instant case.

Third issue: whether the petition merits dismissal for non-exhaustion of administrative remedies.

PEA faults petitioner for seeking judicial intervention in compelling PEA to disclose publicly certain information without first asking PEA the needed information. PEA claims petitioners direct resort to the Court violates the principle of exhaustion of administrative remedies. It also violates the rule that mandamus may issue only if there is no other plain, speedy and adequate remedy in the ordinary course of law.

PEA distinguishes the instant case from Taada v. Tuvera[23] where the Court granted the petition for mandamus even if the petitioners there did not initially demand from the Office of the President the publication of the presidential decrees. PEA points out that in Taada, the Executive Department had an affirmative statutory duty under Article 2 of the Civil Code[24] and Section 1 of Commonwealth Act No. 638[25] to publish the presidential decrees. There was, therefore, no need for the petitioners in Taada to make an initial demand from the Office of the President. In the instant case, PEA claims it has no affirmative statutory duty to disclose publicly information about its renegotiation of the JVA. Thus, PEA asserts that the Court must apply the principle of exhaustion of administrative remedies to the instant case in view of the failure of petitioner here to demand initially from PEA the needed information.

The original JVA sought to dispose to AMARI public lands held by PEA, a government corporation. Under Section 79 of the Government Auditing Code,[26]2 the disposition of government lands to private parties requires public bidding. PEA was under a positive legal duty to disclose to the public the terms and conditions for the sale of its lands. The law obligated PEA to make this public disclosure even without demand from petitioner or from anyone. PEA failed to make this public disclosure because the original JVA, like the Amended JVA, was the result of a negotiated contract, not of a public bidding. Considering that PEA had an affirmative statutory duty to make the public disclosure, and was even in breach of this legal duty, petitioner had the right to seek direct judicial intervention.

Moreover, and this alone is determinative of this issue, the principle of exhaustion of administrative remedies does not apply when the issue involved is a purely legal or constitutional question.[27] The principal issue in the instant case is the capacity of AMARI to acquire lands held by PEA in view of the constitutional ban prohibiting the alienation of lands of the public domain to private corporations. We rule that the principle of exhaustion of administrative remedies does not apply in the instant case.

Fourth issue: whether petitioner has locus standi to bring this suit

PEA argues that petitioner has no standing to institute mandamus proceedings to enforce his constitutional right to information without a showing that PEA refused to perform an affirmative duty imposed on PEA by the Constitution. PEA also claims that petitioner has not shown that he will suffer any concrete injury because of the signing or implementation of the Amended JVA. Thus, there is no actual controversy requiring the exercise of the power of judicial review.

The petitioner has standing to bring this taxpayers suit because the petition seeks to compel PEA to comply with its constitutional duties. There are two constitutional issues involved here. First is the right of citizens to information on matters of public concern. Second is the application of a constitutional provision intended to insure the equitable distribution of alienable lands of the public domain among Filipino citizens. The thrust of the first issue is to compel PEA to disclose publicly information on the sale of government lands worth billions of pesos, information which the Constitution and statutory law mandate PEA to disclose. The thrust of the second issue is to prevent PEA from alienating hundreds of hectares of alienable lands of the public domain in violation of the Constitution, compelling PEA to comply with a constitutional duty to the nation.

Moreover, the petition raises matters of transcendental importance to the public. In Chavez v. PCGG,[28] the Court upheld the right of a citizen to bring a taxpayers suit on matters of transcendental importance to the public, thus -Besides, petitioner emphasizes, the matter of recovering the ill-gotten wealth of the Marcoses is an issue of transcendental importance to the public. He asserts that ordinary taxpayers have a right to initiate and prosecute actions questioning the validity of acts or orders of government agencies or instrumentalities, if the issues raised are of paramount public interest, and if they immediately affect the social, economic and moral well being of the people.Moreover, the mere fact that he is a citizen satisfies the requirement of personal interest, when the proceeding involves the assertion of a public right, such as in this case. He invokes several decisions of this Court which have set aside the procedural matter of locus standi, when the subject of the case involved public interest.x x xIn Taada v. Tuvera, the Court asserted that when the issue concerns a public right and the object of mandamus is to obtain the enforcement of a public duty, the people are regarded as the real parties in interest; and because it is sufficient that petitioner is a citizen and as such is interested in the execution of the laws, he need not show that he has any legal or special interest in the result of the action. In the aforesaid case, the petitioners sought to enforce their right to be informed on matters of public concern, a right then recognized in Section 6, Article IV of the 1973 Constitution, in connection with the rule that laws in order to be valid and enforceable must be published in the Official Gazette or otherwise effectively promulgated. In ruling for the petitioners' legal standing, the Court declared that the right they sought to be enforced is a public right recognized by no less than the fundamental law of the land.Legaspi v. Civil Service Commission, while reiterating Taada, further declared that when a mandamus proceeding involves the assertion of a public right, the requirement of personal interest is satisfied by the mere fact that petitioner is a citizen and, therefore, part of the general 'public' which possesses the right.Further, in Albano v. Reyes, we said that while expenditure of public funds may not have been involved under the questioned contract for the development, management and operation of the Manila International Container Terminal, public interest [was] definitely involved considering the important role [of the subject contract] . . . in the economic development of the country and the magnitude of the financial consideration involved. We concluded that, as a consequence, the disclosure provision in the Constitution would constitute sufficient authority for upholding the petitioner's standing.

Similarly, the instant petition is anchored on the right of the people to information and access to official records, documents and papers a right guaranteed under Section 7, Article III of the 1987 Constitution. Petitioner, a former solicitor general, is a Filipino citizen. Because of the satisfaction of the two basic requisites laid down by decisional law to sustain petitioner's legal standing, i.e. (1) the enforcement of a public right (2) espoused by a Filipino citizen, we rule that the petition at bar should be allowed.

We rule that since the instant petition, brought by a citizen, involves the enforcement of constitutional rights - to information and to the equitable diffusion of natural resources - matters of transcendental public importance, the petitioner has the requisite locus standi.

Fifth issue: whether the constitutional right to information includes official information on on-going negotiations before a final agreement.

Section 7, Article III of the Constitution explains the peoples right to information on matters of public concern in this manner:

Sec. 7. The right of the people to information on matters of public concern shall be recognized. Access to official records, and to documents, and papers pertaining to official acts, transactions, or decisions, as well as to government research data used as basis for policy development, shall be afforded the citizen, subject to such limitations as may be provided by law. (Emphasis supplied)

The State policy of full transparency in all transactions involving public interest reinforces the peoples right to information on matters of public concern. This State policy is expressed in Section 28, Article II of the Constitution, thus:

Sec. 28. Subject to reasonable conditions prescribed by law, the State adopts and implements a policy of full public disclosure of all its transactions involving public interest. (Emphasis supplied)

These twin provisions of the Constitution seek to promote transparency in policy-making and in the operations of the government, as well as provide the people sufficient information to exercise effectively other constitutional rights. These twin provisions are essential to the exercise of freedom of expression. If the government does not disclose its official acts, transactions and decisions to citizens, whatever citizens say, even if expressed without any restraint, will be speculative and amount to nothing. These twin provisions are also essential to hold public officials at all times x x x accountable to the people,[29] for unless citizens have the proper information, they cannot hold public officials accountable for anything. Armed with the right information, citizens can participate in public discussions leading to the formulation of government policies and their effective implementation. An informed citizenry is essential to the existence and proper functioning of any democracy. As explained by the Court in Valmonte v. Belmonte, Jr.[30]

An essential element of these freedoms is to keep open a continuing dialogue or process of communication between the government and the people. It is in the interest of the State that the channels for free political discussion be maintained to the end that the government may perceive and be responsive to the peoples will. Yet, this open dialogue can be effective only to the extent

that the citizenry is informed and thus able to formulate its will intelligently. Only when the participants in the discussion are aware of the issues and have access to information relating thereto can such bear fruit.

PEA asserts, citing Chavez v. PCGG,[31] that in cases of on-going negotiations the right to information is limited to definite propositions of the government. PEA maintains the right does not include access to intra-agency or inter-agency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the exploratory stage.

Also, AMARI contends that petitioner cannot invoke the right at the pre-decisional stage or before the closing of the transaction. To support its contention, AMARI cites the following discussion in the 1986 Constitutional Commission:

Mr. Suarez. And when we say transactions which should be distinguished from contracts, agreements, or treaties or whatever, does the Gentleman refer to the steps leading to the consummation of the contract, or does he refer to the contract itself?Mr. Ople: The transactions used here, I suppose is generic and therefore, it can cover both steps leading to a contract and already a consummated contract, Mr. Presiding Officer.Mr. Suarez: This contemplates inclusion of negotiations leading to the consummation of the transaction.Mr. Ople: Yes, subject only to reasonable safeguards on the national interest.Mr. Suarez: Thank you.[32] (Emphasis supplied)

AMARI argues there must first be a consummated contract before petitioner can invoke the right. Requiring government officials to reveal their deliberations at the pre-decisional stage will degrade the quality of decision-making in government agencies. Government officials will hesitate to express their real sentiments during deliberations if there is immediate public dissemination of their discussions, putting them under all kinds of pressure before they decide.

We must first distinguish between information the law on public bidding requires PEA to disclose publicly, and information the constitutional right to information requires PEA to release to the public. Before the consummation of the contract, PEA must, on its own and without demand from anyone, disclose to the public matters relating to the disposition of its property. These include the size, location, technical description and nature of the property being disposed of, the terms and conditions of the disposition, the parties qualified to bid, the minimum price and similar information. PEA must prepare all these data and disclose them to the public at the start of the disposition process, long before the consummation of the contract, because the Government Auditing Code requires public bidding.If PEA fails to make this disclosure, any citizen can demand from PEA this information at any time during the bidding process.

Information, however, on on-going evaluation or review of bids or proposals being undertaken by the bidding or review committee is not immediately accessible under the right to information. While the evaluation or review is still on-going, there are no official acts, transactions, or decisions on the bids or proposals. However, once the committee makes its official recommendation, there arises a definite proposition on the part of the government. From this

moment, the publics right to information attaches, and any citizen can access all the non-proprietary information leading to such definite proposition. In Chavez v. PCGG,[33] the Court ruled as follows:

Considering the intent of the framers of the Constitution, we believe that it is incumbent upon the PCGG and its officers, as well as other government representatives, to disclose sufficient public information on any proposed settlement they have decided to take up with the ostensible owners and holders of ill-gotten wealth. Such information, though, must pertain to definite propositions of the government, not necessarily to intra-agency or inter-agency recommendations or communications during the stage when common assertions are still in the process of being formulated or are in the exploratory stage. There is need, of course, to observe the same restrictions on disclosure of information in general, as discussed earlier such as on matters involving national security, diplomatic or foreign relations, intelligence and other classified information. (Emphasis supplied)

Contrary to AMARIs contention, the commissioners of the 1986 Constitutional Commission understood that the right to informationcontemplates inclusion of negotiations leading to the consummation of the transaction. Certainly, a consummated contract is not a requirement for the exercise of the right to information. Otherwise, the people can never exercise the right if no contract is consummated, and if one is consummated, it may be too late for the public to expose its defects.

Requiring a consummated contract will keep the public in the dark until the contract, which may be grossly disadvantageous to the government or even illegal, becomes a fait accompli. This negates the State policy of full transparency on matters of public concern, a situation which the framers of the Constitution could not have intended. Such a requirement will prevent the citizenry from participating in the public discussion of any proposed contract, effectively truncating a basic right enshrined in the Bill of Rights. We can allow neither an emasculation of a constitutional right, nor a retreat by the State of its avowed policy of full disclosure of all its transactions involving public interest.

The right covers three categories of information which are matters of public concern, namely: (1) official records; (2) documents and papers pertaining to official acts, transactions and decisions; and (3) government research data used in formulating policies. The first category refers to any document that is part of the public records in the custody of government agencies or officials. The second category refers to documents and papers recording, evidencing, establishing, confirming, supporting, justifying or explaining official acts, transactions or decisions of government agencies or officials. The third category refers to research data, whether raw, collated or processed, owned by the government and used in formulating government policies.

The information that petitioner may access on the renegotiation of the JVA includes evaluation reports, recommendations, legal and expert opinions, minutes of meetings, terms of reference and other documents attached to such reports or minutes, all relating to the JVA. However, the right to information does not compel PEA to prepare lists, abstracts, summaries and the like relating to the renegotiation of the JVA.[34] The right only affords access to records, documents and papers, which means the opportunity to inspect and copy them. One who exercises the right must copy the records, documents and papers at his expense. The exercise of the right is also subject to reasonable regulations to protect the integrity of the public records and to minimize disruption to

government operations, like rules specifying when and how to conduct the inspection and copying.[35]

The right to information, however, does not extend to matters recognized as privileged information under the separation of powers.[36]The right does not also apply to information on military and diplomatic secrets, information affecting national security, and information on investigations of crimes by law enforcement agencies before the prosecution of the accused, which courts have long recognized as confidential.[37] The right may also be subject to other limitations that Congress may impose by law.

There is no claim by PEA that the information demanded by petitioner is privileged information rooted in the separation of powers. The information does not cover Presidential conversations, correspondences, or discussions during closed-door Cabinet meetings which, like internal deliberations of the Supreme Court and other collegiate courts, or executive sessions of either house of Congress,[38] are recognized as confidential. This kind of information cannot be pried open by a co-equal branch of government. A frank exchange of exploratory ideas and assessments, free from the glare of publicity and pressure by interested parties, is essential to protect the independence of decision-making of those tasked to exercise Presidential, Legislative and Judicial power.[39] This is not the situation in the instant case.

We rule, therefore, that the constitutional right to information includes official information on on-going negotiations before a final contract. The information, however, must constitute definite propositions by the government and should not cover recognized exceptions like privileged information, military and diplomatic secrets and similar matters affecting national security and public order.[40] Congress has also prescribed other limitations on the right to information in several legislations.[41]

Sixth issue: whether stipulations in the Amended JVA for the transfer to AMARI of lands, reclaimed or to be reclaimed, violate the Constitution.

The Regalian Doctrine

The ownership of lands reclaimed from foreshore and submerged areas is rooted in the Regalian doctrine which holds that the State owns all lands and waters of the public domain. Upon the Spanish conquest of the Philippines, ownership of all lands, territories and possessions in the Philippines passed to the Spanish Crown.[42] The King, as the sovereign ruler and representative of the people, acquired and owned all lands and territories in the Philippines except those he disposed of by grant or sale to private individuals.

The 1935, 1973 and 1987 Constitutions adopted the Regalian doctrine substituting, however, the State, in lieu of the King, as the owner of all lands and waters of the public domain. The Regalian doctrine is the foundation of the time-honored principle of land ownership that all lands that were not acquired from the Government, either by purchase or by grant, belong to the public domain.[43]Article 339 of the Civil Code of 1889, which is now Article 420 of the Civil Code of 1950, incorporated the Regalian doctrine.

Ownership and Disposition of Reclaimed Lands

The Spanish Law of Waters of 1866 was the first statutory law governing the ownership and disposition of reclaimed lands in the Philippines. On May 18, 1907, the Philippine Commission enacted Act No. 1654 which provided for the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. Later, on November 29, 1919, the Philippine Legislature approved Act No. 2874, the Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. On November 7, 1936, the National Assembly passed Commonwealth Act No. 141, also known as the Public Land Act, which authorized the lease, but not the sale, of reclaimed lands of the government to corporations and individuals. CA No. 141 continues to this day as the general law governing the classification and disposition of lands of the public domain.

The Spanish Law of Waters of 1866 and the Civil Code of 1889

Under the Spanish Law of Waters of 1866, the shores, bays, coves, inlets and all waters within the maritime zone of the Spanish territory belonged to the public domain for public use.[44] The Spanish Law of Waters of 1866 allowed the reclamation of the sea under Article 5, which provided as follows:Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons, with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority.

Under the Spanish Law of Waters, land reclaimed from the sea belonged to the party undertaking the reclamation, provided the government issued the necessary permit and did not reserve ownership of the reclaimed land to the State.

Article 339 of the Civil Code of 1889 defined property of public dominion as follows:Art. 339. Property of public dominion is

1. That devoted to public use, such as roads, canals, rivers, torrents, ports and bridges constructed by the State, riverbanks, shores, roadsteads, and that of a similar character;

2. That belonging exclusively to the State which, without being of general public use, is employed in some public service, or in the development of the national wealth, such as walls, fortresses, and other works for the defense of the territory, and mines, until granted to private individuals.

Property devoted to public use referred to property open for use by the public. In contrast, property devoted to public service referred to property used for some specific public service and open only to those authorized to use the property.

Property of public dominion referred not only to property devoted to public use, but also to property not so used but employed to develop the national wealth. This class of property

constituted property of public dominion although employed for some economic or commercial activity to increase the national wealth.

Article 341 of the Civil Code of 1889 governed the re-classification of property of public dominion into private property, to wit:Art. 341. Property of public dominion, when no longer devoted to public use or to the defense of the territory, shall become a part of the private property of the State.

This provision, however, was not self-executing. The legislature, or the executive department pursuant to law, must declare the property no longer needed for public use or territorial defense before the government could lease or alienate the property to private parties.[45]

Act No. 1654 of the Philippine Commission

On May 8, 1907, the Philippine Commission enacted Act No. 1654 which regulated the lease of reclaimed and foreshore lands. The salient provisions of this law were as follows:Section 1. The control and disposition of the foreshore as defined in existing law, and the title to all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise throughout the Philippine Islands, shall be retained by the Government without prejudice to vested rights and without prejudice to rights conceded to the City of Manila in the Luneta Extension.Section 2. (a) The Secretary of the Interior shall cause all Government or public lands made or reclaimed by the Government by dredging or filling or otherwise to be divided into lots or blocks, with the necessary streets and alleyways located thereon, and shall cause plats and plans of such surveys to be prepared and filed with the Bureau of Lands.(b) Upon completion of such plats and plans the Governor-General shall give notice to the public that such parts of the lands so made or reclaimed as are not needed for public purposes will be leased for commercial and business purposes, x x x.x x x(e) The leases above provided for shall be disposed of to the highest and best bidder therefore, subject to such regulations and safeguards as the Governor-General may by executive order prescribe. (Emphasis supplied)

Act No. 1654 mandated that the government should retain title to all lands reclaimed by the government. The Act also vested in the government control and disposition of foreshore lands. Private parties could lease lands reclaimed by the government only if these lands were no longer needed for public purpose. Act No. 1654 mandated public bidding in the lease of government reclaimed lands. Act No. 1654 made government reclaimed lands sui generis in that unlike other public lands which the government could sell to private parties, these reclaimed lands were available only for lease to private parties.

Act No. 1654, however, did not repeal Section 5 of the Spanish Law of Waters of 1866. Act No. 1654 did not prohibit private parties from reclaiming parts of the sea under Section 5 of the Spanish Law of Waters. Lands reclaimed from the sea by private parties with government permission remained private lands.

Act No. 2874 of the Philippine Legislature

On November 29, 1919, the Philippine Legislature enacted Act No. 2874, the Public Land Act.[46] The salient provisions of Act No. 2874, on reclaimed lands, were as follows:

Sec. 6. The Governor-General, upon the recommendation of the Secretary of Agriculture and Natural Resources, shall from time to time classify the lands of the public domain into

(a) Alienable or disposable,(b) Timber, and(c) Mineral lands, x x x.Sec. 7. For the purposes of the government and disposition of alienable or disposable public lands, the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall from time to time declare what lands are open to disposition or concession under this Act.Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially delimited or classified x x x.x x xSec. 55. Any tract of land of the public domain which, being neither timber nor mineral land, shall be classified as suitable for residential purposes or for commercial, industrial, or other productive purposes other than agricultural purposes, and shall be open to disposition or concession, shall be disposed of under the provisions of this chapter, and not otherwise.Sec. 56. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers;(d) Lands not included in any of the foregoing classes.x x x.Sec. 58. The lands comprised in classes (a), (b), and (c) of section fifty-six shall be disposed of to private parties by lease only and not otherwise, as soon as the Governor-General, upon recommendation by the Secretary of Agriculture and Natural Resources, shall declare that the same are not necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act. (Emphasis supplied)

Section 6 of Act No. 2874 authorized the Governor-General to classify lands of the public domain into x x x alienable or disposable[47]lands. Section 7 of the Act empowered the Governor-General to declare what lands are open to disposition or concession. Section 8 of the Act limited alienable or disposable lands only to those lands which have been officially delimited and classified.

Section 56 of Act No. 2874 stated that lands disposable under this title[48] shall be classified as government reclaimed, foreshore and marshy lands, as well as other lands. All these lands, however, must be suitable for residential, commercial, industrial or other productivenon-agricultural purposes. These provisions vested upon the Governor-General the power to classify inalienable lands of the public domain into disposable lands of the public domain. These provisions also empowered the Governor-General to classify further such disposable lands of the public domain into government reclaimed, foreshore or marshy lands of the public domain, as well as other non-agricultural lands.

Section 58 of Act No. 2874 categorically mandated that disposable lands of the public domain classified as government reclaimed, foreshore and marshy lands shall be disposed of to private parties by lease only and not otherwise. The Governor-General, before allowing the lease of these lands to private parties, must formally declare that the lands were not necessary for the public service. Act No. 2874 reiterated the State policy to lease and not to sell government reclaimed, foreshore and marshy lands of the public domain, a policy first enunciated in 1907 in Act No. 1654. Government reclaimed, foreshore and marshy lands remained sui generis, as the only alienable or disposable lands of the public domain that the government could not sell to private parties.

The rationale behind this State policy is obvious. Government reclaimed, foreshore and marshy public lands for non-agricultural purposes retain their inherent potential as areas for public service. This is the reason the government prohibited the sale, and only allowed the lease, of these lands to private parties. The State always reserved these lands for some future public service.

Act No. 2874 did not authorize the reclassification of government reclaimed, foreshore and marshy lands into other non-agricultural lands under Section 56 (d). Lands falling under Section 56 (d) were the only lands for non-agricultural purposes the government could sell to private parties. Thus, under Act No. 2874, the government could not sell government reclaimed, foreshore and marshy lands to private parties, unless the legislature passed a law allowing their sale.[49]

Act No. 2874 did not prohibit private parties from reclaiming parts of the sea pursuant to Section 5 of the Spanish Law of Waters of 1866. Lands reclaimed from the sea by private parties with government permission remained private lands.

Dispositions under the 1935 Constitution

On May 14, 1935, the 1935 Constitution took effect upon its ratification by the Filipino people. The 1935 Constitution, in adopting the Regalian doctrine, declared in Section 1, Article XIII, that

Section 1. All agricultural, timber, and mineral lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inauguration of the Government established under this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no license, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years,

renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases beneficial use may be the measure and limit of the grant.(Emphasis supplied)

The 1935 Constitution barred the alienation of all natural resources except public agricultural lands, which were the only natural resources the State could alienate. Thus, foreshore lands, considered part of the States natural resources, became inalienable by constitutional fiat, available only for lease for 25 years, renewable for another 25 years. The government could alienate foreshore lands only after these lands were reclaimed and classified as alienable agricultural lands of the public domain. Government reclaimed and marshy lands of the public domain, being neither timber nor mineral lands, fell under the classification of public agricultural lands.[50]However, government reclaimed and marshy lands, although subject to classification as disposable public agricultural lands, could only be leased and not sold to private parties because of Act No. 2874.

The prohibition on private parties from acquiring ownership of government reclaimed and marshy lands of the public domain was only a statutory prohibition and the legislature could therefore remove such prohibition. The 1935 Constitution did not prohibit individuals and corporations from acquiring government reclaimed and marshy lands of the public domain that were classified as agricultural lands under existing public land laws. Section 2, Article XIII of the 1935 Constitution provided as follows:Section 2. No private corporation or association may acquire, lease, or hold public agricultural lands in excess of one thousand and twenty four hectares, nor may any individual acquire such lands by purchase in excess of one hundred and forty hectares, or by lease in excess of one thousand and twenty-four hectares, or by homestead in excess of twenty-four hectares. Lands adapted to grazing, not exceeding two thousand hectares, may be leased to an individual, private corporation, or association. (Emphasis supplied)

Still, after the effectivity of the 1935 Constitution, the legislature did not repeal Section 58 of Act No. 2874 to open for sale to private parties government reclaimed and marshy lands of the public domain. On the contrary, the legislature continued the long established State policy of retaining for the government title and ownership of government reclaimed and marshy lands of the public domain.

Commonwealth Act No. 141 of the Philippine National Assembly

On November 7, 1936, the National Assembly approved Commonwealth Act No. 141, also known as the Public Land Act, which compiled the then existing laws on lands of the public domain. CA No. 141, as amended, remains to this day the existing general lawgoverning the classification and disposition of lands of the public domain other than timber and mineral lands.[51]

Section 6 of CA No. 141 empowers the President to classify lands of the public domain into alienable or disposable[52] lands of the public domain, which prior to such classification are inalienable and outside the commerce of man. Section 7 of CA No. 141 authorizes the President to declare what lands are open to disposition or concession. Section 8 of CA No. 141 states that the government can declare open for disposition or concession only lands that are officially delimited and classified. Sections 6, 7 and 8 of CA No. 141 read as follows:

Sec. 6. The President, upon the recommendation of the Secretary of Agriculture and Commerce, shall from time to time classify the lands of the public domain into

(a) Alienable or disposable,(b) Timber, and(c) Mineral lands,and may at any time and in like manner transfer such lands from one class to another,[53] for the purpose of their administration and disposition.Sec. 7. For the purposes of the administration and disposition of alienable or disposable public lands, the President, upon recommendation by the Secretary of Agriculture and Commerce, shall from time to time declare what lands are open to disposition or concession under this Act.Sec. 8. Only those lands shall be declared open to disposition or concession which have been officially delimited and classified and, when practicable, surveyed, and which have not been reserved for public or quasi-public uses, nor appropriated by the Government, nor in any manner become private property, nor those on which a private right authorized and recognized by this Act or any other valid law may be claimed, or which, having been reserved or appropriated, have ceased to be so. x x x.

Thus, before the government could alienate or dispose of lands of the public domain, the President must first officially classify these lands as alienable or disposable, and then declare them open to disposition or concession. There must be no law reserving these lands for public or quasi-public uses.

The salient provisions of CA No. 141, on government reclaimed, foreshore and marshy lands of the public domain, are as follows:

Sec. 58. Any tract of land of the public domain which, being neither timber nor mineral land, is intended to be used for residential purposes or for commercial, industrial, or other productive purposes other than agricultural, and is open to disposition or concession, shall be disposed of under the provisions of this chapter and not otherwise.Sec. 59. The lands disposable under this title shall be classified as follows:

(a) Lands reclaimed by the Government by dredging, filling, or other means;

(b) Foreshore;(c) Marshy lands or lands covered with water bordering upon the shores or banks of navigable lakes or rivers;(d) Lands not included in any of the foregoing classes.Sec. 60. Any tract of land comprised under this title may be leased or sold, as the case may be, to any person, corporation, or association authorized to purchase or lease public lands for agricultural purposes. x x x.Sec. 61. The lands comprised in classes (a), (b), and (c) of section fifty-nine shall be disposed of to private parties by lease only and not otherwise, as soon as the President, upon recommendation by the Secretary of Agriculture, shall declare that the same are not

necessary for the public service and are open to disposition under this chapter. The lands included in class (d) may be disposed of by sale or lease under the provisions of this Act. (Emphasis supplied)

Section 61 of CA No. 141 readopted, after the effectivity of the 1935 Constitution, Section 58 of Act No. 2874 prohibiting the sale of government reclaimed, foreshore and marshy disposable lands of the public domain. All these lands are intended for residential, commercial, industrial or other non-agricultural purposes. As before, Section 61 allowed only the lease of such lands to private parties.The government could sell to private parties only lands falling under Section 59 (d) of CA No. 141, or those lands for non-agricultural purposes not classified as government reclaimed, foreshore and marshy disposable lands of the public domain. Foreshore lands, however, became inalienable under the 1935 Constitution which only allowed the lease of these lands to qualified private parties.

Section 58 of CA No. 141 expressly states that disposable lands of the public domain intended for residential, commercial, industrial or other productive purposes other than agricultural shall be disposed of under the provisions of this chapter and not otherwise. Under Section 10 of CA No. 141, the term disposition includes lease of the land. Any disposition of government reclaimed, foreshore and marshy disposable lands for non-agricultural purposes must comply with Chapter IX, Title III of CA No. 141,[54] unless a subsequent law amended or repealed these provisions.

In his concurring opinion in the landmark case of Republic Real Estate Corporation v. Court of Appeals,[55] Justice Reynato S. Puno summarized succinctly the law on this matter, as follows:Foreshore lands are lands of public dominion intended for public use. So too are lands reclaimed by the government by dredging, filling, or other means. Act 1654 mandated that the control and disposition of the foreshore and lands under water remained in the national government. Said law allowed only the leasing of reclaimed land. The Public Land Acts of 1919 and 1936 also declared that the foreshore and lands reclaimed by the government were to be disposed of to private parties by lease only and not otherwise. Before leasing, however, the Governor-General, upon recommendation of the Secretary of Agriculture and Natural Resources, had first to determine that the land reclaimed was not necessary for the public service. This requisite must have been met before the land could be disposed of. But even then, the foreshore and lands under water were not to be alienated and sold to private parties. The disposition of the reclaimed land was only by lease.The land remained property of the State. (Emphasis supplied)

As observed by Justice Puno in his concurring opinion, Commonwealth Act No. 141 has remained in effect at present.

The State policy prohibiting the sale to private parties of government reclaimed, foreshore and marshy alienable lands of the public domain, first implemented in 1907 was thus reaffirmed in CA No. 141 after the 1935 Constitution took effect. The prohibition on the sale of foreshore lands, however, became a constitutional edict under the 1935 Constitution. Foreshore lands became inalienable as natural resources of the State, unless reclaimed by the government and classified as agricultural lands of the public domain, in which case they would fall under the classification of government reclaimed lands.

After the effectivity of the 1935 Constitution, government reclaimed and marshy disposable lands of the public domain continued to be only leased and not sold to private parties.[56] These lands remained sui generis, as the only alienable or disposable lands of the public domain the government could not sell to private parties.

Since then and until now, the only way the government can sell to private parties government reclaimed and marshy disposable lands of the public domain is for the legislature to pass a law authorizing such sale. CA No. 141 does not authorize the President to reclassify government reclaimed and marshy lands into other non-agricultural lands under Section 59 (d). Lands classified under Section 59 (d) are the only alienable or disposable lands for non-agricultural purposes that the government could sell to private parties.

Moreover, Section 60 of CA No. 141 expressly requires congressional authority before lands under Section 59 that the government previously transferred to government units or entities could be sold to private parties. Section 60 of CA No. 141 declares that

Sec. 60. x x x The area so leased or sold shall be such as shall, in the judgment of the Secretary of Agriculture and Natural Resources, be reasonably necessary for the purposes for which such sale or lease is requested, and shall not exceed one hundred and forty-four hectares: Provided, however, That this limitation shall not apply to grants, donations, or transfers made to a province, municipality or branch or subdivision of the Government for the purposes deemed by said entities conducive to the public interest; but the land so granted, donated, or transferred to a province, municipality or branch or subdivision of the Government shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by Congress: x x x. (Emphasis supplied)

The congressional authority required in Section 60 of CA No. 141 mirrors the legislative authority required in Section 56 of Act No. 2874.

One reason for the congressional authority is that Section 60 of CA No. 141 exempted government units and entities from the maximum area of public lands that could be acquired from the State. These government units and entities should not just turn around and sell these lands to private parties in violation of constitutional or statutory limitations. Otherwise, the transfer of lands for non-agricultural purposes to government units and entities could be used to circumvent constitutional limitations on ownership of alienable or disposable lands of the public domain. In the same manner, such transfers could also be used to evade the statutory prohibition in CA No. 141 on the sale of government reclaimed and marshy lands of the public domain to private parties. Section 60 of CA No. 141 constitutes by operation of law a lien on these lands.[57]

In case of sale or lease of disposable lands of the public domain falling under Section 59 of CA No. 141, Sections 63 and 67 require apublic bidding. Sections 63 and 67 of CA No. 141 provide as follows:Sec. 63. Whenever it is decided that lands covered by this chapter are not needed for public purposes, the Director of Lands shall ask the Secretary of Agriculture and Commerce (now the Secretary of Natural Resources) for authority to dispose of the same. Upon receipt of such authority, the Director of Lands shall give notice by public advertisement in the same manner as in the case of leases or sales of agricultural public land, x x x.

Sec. 67. The lease or sale shall be made by oral bidding; and adjudication shall be made to the highest bidder. x x x. (Emphasis supplied)

Thus, CA No. 141 mandates the Government to put to public auction all leases or sales of alienable or disposable lands of the public domain.[58]

Like Act No. 1654 and Act No. 2874 before it, CA No. 141 did not repeal Section 5 of the Spanish Law of Waters of 1866. Private parties could still reclaim portions of the sea with government permission. However, the reclaimed land could become private land only if classified as alienable agricultural land of the public domain open to disposition under CA No. 141. The 1935 Constitution prohibited the alienation of all natural resources except public agricultural lands.

The Civil Code of 1950

The Civil Code of 1950 readopted substantially the definition of property of public dominion found in the Civil Code of 1889. Articles 420 and 422 of the Civil Code of 1950 state that

Art. 420. The following things are property of public dominion:(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and bridges

constructed by the State, banks, shores, roadsteads, and others of similar character;

(2) Those which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth.

x x x.Art. 422. Property of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State.

Again, the government must formally declare that the property of public dominion is no longer needed for public use or public service, before the same could be classified as patrimonial property of the State.[59] In the case of government reclaimed and marshy lands of the public domain, the declaration of their being disposable, as well as the manner of their disposition, is governed by the applicable provisions of CA No. 141.

Like the Civil Code of 1889, the Civil Code of 1950 included as property of public dominion those properties of the State which, without being for public use, are intended for public service or the development of the national wealth. Thus, government reclaimed and marshy lands of the State, even if not employed for public use or public service, if developed to enhance the national wealth, are classified as property of public dominion.

Dispositions under the 1973 Constitution

The 1973 Constitution, which took effect on January 17, 1973, likewise adopted the Regalian doctrine. Section 8, Article XIV of the 1973 Constitution stated that

Sec. 8. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, wildlife, and other natural resources of the Philippines belong to the State. With the exception of agricultural, industrial or commercial, residential, and resettlement lands of the public domain, natural resources shall not be alienated, and no license, concession, or lease for the exploration, development, exploitation, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for not more than twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water power, in which cases, beneficial use may be the measure and the limit of the grant. (Emphasis supplied)

The 1973 Constitution prohibited the alienation of all natural resources with the exception of agricultural, industrial or commercial, residential, and resettlement lands of the public domain. In contrast, the 1935 Constitution barred the alienation of all natural resources except public agricultural lands. However, the term public agricultural lands in the 1935 Constitution encompassed industrial, commercial, residential and resettlement lands of the public domain.[60] If the land of public domain were neither timber nor mineral land, it would fall under the classification of agricultural land of the public domain. Both the 1935 and 1973 Constitutions, therefore, prohibited the alienation of all natural resources except agricultural lands of the public domain.

The 1973 Constitution, however, limited the alienation of lands of the public domain to individuals who were citizens of the Philippines. Private corporations, even if wholly owned by Philippine citizens, were no longer allowed to acquire alienable lands of the public domain unlike in the 1935 Constitution. Section 11, Article XIV of the 1973 Constitution declared thatSec. 11. The Batasang Pambansa, taking into account conservation, ecological, and development requirements of the natural resources, shall determine by law the size of land of the public domain which may be developed, held or acquired by, or leased to, any qualified individual, corporation, or association, and the conditions therefor. No private corporation or association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area nor may any citizen hold such lands by lease in excess of five hundred hectares or acquire by purchase, homestead or grant, in excess of twenty-four hectares. No private corporation or association may hold by lease, concession, license or permit, timber or forest lands and other timber or forest resources in excess of one hundred thousand hectares. However, such area may be increased by the Batasang Pambansa upon recommendation of the National Economic and Development Authority. (Emphasis supplied)

Thus, under the 1973 Constitution, private corporations could hold alienable lands of the public domain only through lease. Only individuals could now acquire alienable lands of the public domain, and private corporations became absolutely barred from acquiring any kind of alienable land of the public domain. The constitutional ban extended to all kinds of alienable lands of the public domain, while the statutory ban under CA No. 141 applied only to government reclaimed, foreshore and marshy alienable lands of the public domain.

PD No. 1084 Creating the Public Estates Authority

On February 4, 1977, then President Ferdinand Marcos issued Presidential Decree No. 1084 creating PEA, a wholly government owned and controlled corporation with a special charter. Sections 4 and 8 of PD No. 1084, vests PEA with the following purposes and powers:

Sec. 4. Purpose. The Authority is hereby created for the following purposes:(a) To reclaim land, including foreshore and submerged areas, by dredging, filling or other means, or to acquire reclaimed land;

(b) To develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands, buildings, estates and other forms of real property, owned, managed, controlled and/or operated by the government;(c) To provide for, operate or administer such service as may be necessary for the efficient, economical and beneficial utilization of the above properties.Sec. 5. Powers and functions of the Authority. The Authority shall, in carrying out the purposes for which it is created, have the following powers and functions:(a)To prescribe its by-laws.x x x(i) To hold lands of the public domain in excess of the area permitted to private corporations by statute.(j) To reclaim lands and to construct work across, or otherwise, any stream, watercourse, canal, ditch, flume x x x.x x x(o) To perform such acts and exercise such functions as may be necessary for the attainment of the purposes and objectives herein specified. (Emphasis supplied)

PD No. 1084 authorizes PEA to reclaim both foreshore and submerged areas of the public domain. Foreshore areas are those covered and uncovered by the ebb and flow of the tide.[61] Submerged areas are those permanently under water regardless of the ebb and flow of the tide.[62] Foreshore and submerged areas indisputably belong to the public domain[63] and are inalienable unless reclaimed, classified as alienable lands open to disposition, and further declared no longer needed for public service.

The ban in the 1973 Constitution on private corporations from acquiring alienable lands of the public domain did not apply to PEA since it was then, and until today, a fully owned government corporation. The constitutional ban applied then, as it still applies now, only to private corporations and associations. PD No. 1084 expressly empowers PEA to hold lands of the public domain even in excess of the area permitted to private corporations by statute. Thus, PEA can hold title to private lands, as well as title to lands of the public domain.

In order for PEA to sell its reclaimed foreshore and submerged alienable lands of the public domain, there must be legislative authority empowering PEA to sell these lands. This legislative authority is necessary in view of Section 60 of CA No.141, which states

Sec. 60. x x x; but the land so granted, donated or transferred to a province, municipality, or branch or subdivision of the Government shall not be alienated, encumbered or otherwise

disposed of in a manner affecting its title, except when authorized by Congress; x x x. (Emphasis supplied)

Without such legislative authority, PEA could not sell but only lease its reclaimed foreshore and submerged alienable lands of the public domain. Nevertheless, any legislative authority granted to PEA to sell its reclaimed alienable lands of the public domain would be subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. Hence, such legislative authority could only benefit private individuals.

Dispositions under the 1987 Constitution

The 1987 Constitution, like the 1935 and 1973 Constitutions before it, has adopted the Regalian doctrine. The 1987 Constitution declares that all natural resources are owned by the State, and except for alienable agricultural lands of the public domain, natural resources cannot be alienated. Sections 2 and 3, Article XII of the 1987 Constitution state thatSection 2. All lands of the public domain, waters, minerals, coal, petroleum and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. The exploration, development, and utilization of natural resources shall be under the full control and supervision of the State. x x x.Section 3. Lands of the public domain are classified into agricultural, forest or timber, mineral lands, and national parks. Agricultural lands of the public domain may be further classified by law according to the uses which they may be devoted. Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, for a period not exceeding twenty-five years, renewable for not more than twenty-five years, and not to exceed one thousand hectares in area. Citizens of the Philippines may lease not more than five hundred hectares, or acquire not more than twelve hectares thereof by purchase, homestead, or grant.Taking into account the requirements of conservation, ecology, and development, and subject to the requirements of agrarian reform, the Congress shall determine, by law, the size of lands of the public domain which may be acquired, developed, held, or leased and the conditions therefor. (Emphasis supplied)

The 1987 Constitution continues the State policy in the 1973 Constitution banning private corporations from acquiring any kind of alienable land of the public domain. Like the 1973 Constitution, the 1987 Constitution allows private corporations to hold alienable lands of the public domain only through lease. As in the 1935 and 1973 Constitutions, the general law governing the lease to private corporations of reclaimed, foreshore and marshy alienable lands of the public domain is still CA No. 141.

The Rationale behind the Constitutional Ban

The rationale behind the constitutional ban on corporations from acquiring, except through lease, alienable lands of the public domain is not well understood. During the deliberations of the 1986 Constitutional Commission, the commissioners probed the rationale behind this ban, thus:

FR. BERNAS: Mr. Vice-President, my questions have reference to page 3, line 5 which says:`No private corporation or association may hold alienable lands of the public domain except by lease, not to exceed one thousand hectares in area.If we recall, this provision did not exist under the 1935 Constitution, but this was introduced in the 1973 Constitution. In effect, it prohibits private corporations from acquiring alienable public lands. But it has not been very clear in jurisprudence what the reason for this is. In some of the cases decided in 1982 and 1983, it was indicated that the purpose of this is to prevent large landholdings. Is that the intent of this provision?MR. VILLEGAS: I think that is the spirit of the provision.FR. BERNAS: In existing decisions involving the Iglesia ni Cristo, there were instances where the Iglesia ni Cristo was not allowed to acquire a mere 313-square meter land where a chapel stood because the Supreme Court said it would be in violation of this. (Emphasis supplied)

In Ayog v. Cusi,[64] the Court explained the rationale behind this constitutional ban in this way:

Indeed, one purpose of the constitutional prohibition against purchases of public agricultural lands by private corporations is to equitably diffuse land ownership or to encourage owner-cultivatorship and the economic family-size farm and to prevent a recurrence of cases like the instant case. Huge landholdings by corporations or private persons had spawned social unrest.

However, if the constitutional intent is to prevent huge landholdings, the Constitution could have simply limited the size of alienable lands of the public domain that corporations could acquire. The Constitution could have followed the limitations on individuals, who could acquire not more than 24 hectares of alienable lands of the public domain under the 1973 Constitution, and not more than 12 hectares under the 1987 Constitution.

If the constitutional intent is to encourage economic family-size farms, placing the land in the name of a corporation would be more effective in preventing the break-up of farmlands. If the farmland is registered in the name of a corporation, upon the death of the owner, his heirs would inherit shares in the corporation instead of subdivided parcels of the farmland. This would prevent the continuing break-up of farmlands into smaller and smaller plots from one generation to the next.

In actual practice, the constitutional ban strengthens the constitutional limitation on individuals from acquiring more than the allowed area of alienable lands of the public domain. Without the constitutional ban, individuals who already acquired the maximum area of alienable lands of the public domain could easily set up corporations to acquire more alienable public lands. An individual could own as many corporations as his means would allow him. An individual could even hide his ownership of a corporation by putting his nominees as stockholders of the corporation. The corporation is a convenient vehicle to circumvent the constitutional limitation on acquisition by individuals of alienable lands of the public domain.

The constitutional intent, under the 1973 and 1987 Constitutions, is to transfer ownership of only a limited area of alienable land of the public domain to a qualified individual.  This constitutional intent is safeguarded by the provision prohibiting corporations from acquiring alienable lands of the public domain, since the vehicle to circumvent the constitutional intent is removed. The available alienable public lands are gradually decreasing in the face of an ever-growing population. The most effective way to insure faithful adherence to this constitutional intent is to grant or sell alienable lands of the public domain only to individuals. This, it would seem, is the practical benefit arising from the constitutional ban.

The Amended Joint Venture Agreement

The subject matter of the Amended JVA, as stated in its second Whereas clause, consists of three properties, namely:

1. [T]hree partially reclaimed and substantially eroded islands along Emilio Aguinaldo Boulevard in Paranaque and Las Pinas, Metro Manila, with a combined titled area of 1,578,441 square meters;

2. [A]nother area of 2,421,559 square meters contiguous to the three islands; and3. [A]t AMARIs option as approved by PEA, an additional 350 hectares more or less to

regularize the configuration of the reclaimed area.[65]

PEA confirms that the Amended JVA involves the development of the Freedom Islands and further reclamation of about 250 hectares x x x, plus an option granted to AMARI to subsequently reclaim another 350 hectares x x x.[66]

In short, the Amended JVA covers a reclamation area of 750 hectares. Only 157.84 hectares of the 750-hectare reclamation project have beenreclaimed, and the rest of the 592.15 hectares are still submerged areas forming part of Manila Bay.

Under the Amended JVA, AMARI will reimburse PEA the sum of P1,894,129,200.00 for PEAs actual cost in partially reclaiming the Freedom Islands. AMARI will also complete, at its own expense, the reclamation of the Freedom Islands. AMARI will further shoulder all the reclamation costs of all the other areas, totaling 592.15 hectares, still to be reclaimed. AMARI and PEA will share, in the proportion of 70 percent and 30 percent, respectively, the total net usable area which is defined in the Amended JVA as the total reclaimed area less 30 percent earmarked for common areas. Title to AMARIs share in the net usable area, totaling 367.5 hectares, will be issued in the name of AMARI. Section 5.2 (c) of the Amended JVA provides that

x x x, PEA shall have the duty to execute without delay the necessary deed of transfer or conveyance of the title pertaining to AMARIs Land share based on the Land Allocation Plan. PEA, when requested in writing by AMARI, shall then cause the issuance and delivery of the proper certificates of title covering AMARIs Land Share in the name of AMARI, x x x; provided, that if more than seventy percent (70%) of the titled area at any given time pertains to AMARI, PEA shall deliver to AMARI only seventy percent (70%) of the titles pertaining to AMARI, until such time when a corresponding proportionate area of additional land pertaining to PEA has been titled. (Emphasis supplied)

Indisputably, under the Amended JVA AMARI will acquire and own a maximum of 367.5 hectares of reclaimed land which will be titled in its name.

To implement the Amended JVA, PEA delegated to the unincorporated PEA-AMARI joint venture PEAs statutory authority, rights and privileges to reclaim foreshore and submerged areas in Manila Bay. Section 3.2.a of the Amended JVA states that

PEA hereby contributes to the joint venture its rights and privileges to perform Rawland Reclamation and Horizontal Development as well as own the Reclamation Area, thereby granting the Joint Venture the full and exclusive right, authority and privilege to undertake the Project in accordance with the Master Development Plan.

The Amended JVA is the product of a renegotiation of the original JVA dated April 25, 1995 and its supplemental agreement dated August 9, 1995.

The Threshold Issue

The threshold issue is whether AMARI, a private corporation, can acquire and own under the Amended JVA 367.5 hectares of reclaimed foreshore and submerged areas in Manila Bay in view of Sections 2 and 3, Article XII of the 1987 Constitution which state that:

Section 2. All lands of the public domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other natural resources are owned by the State. With the exception of agricultural lands, all other natural resources shall not be alienated. x x x.x x xSection 3. x x x Alienable lands of the public domain shall be limited to agricultural lands. Private corporations or associations may not hold such alienable lands of the public domain except by lease, x x x.(Emphasis supplied)

Classification of Reclaimed Foreshore and Submerged Areas

PEA readily concedes that lands reclaimed from foreshore or submerged areas of Manila Bay are alienable or disposable lands of the public domain. In its Memorandum,[67] PEA admits thatUnder the Public Land Act (CA 141, as amended), reclaimed lands are classified as alienable and disposable lands of the public domain:

Sec. 59. The lands disposable under this title shall be classified as follows:(a) Lands reclaimed by the government by dredging, filling, or other means;x x x. (Emphasis supplied)

Likewise, the Legal Task Force[68] constituted under Presidential Administrative Order No. 365 admitted in its Report and Recommendation to then President Fidel V. Ramos, [R]eclaimed lands are classified as alienable and disposable lands of the public domain.[69] The Legal Task Force concluded thatD. ConclusionReclaimed lands are lands of the public domain. However, by statutory authority, the rights of ownership and disposition over reclaimed lands have been transferred to PEA, by virtue of which PEA, as owner, may validly convey the same to any qualified person without violating the Constitution or any statute.The constitutional provision prohibiting private corporations from holding public land, except by lease (Sec. 3, Art. XVII,[70] 1987 Constitution), does not apply to reclaimed lands whose ownership has passed on to PEA by statutory grant.

Under Section 2, Article XII of the 1987 Constitution, the foreshore and submerged areas of Manila Bay are part of the lands of the public domain, waters x x x and other natural resources and consequently owned by the State. As such, foreshore and submerged areas shall not be alienated, unless they are classified as agricultural lands of the public domain. The mere reclamation of these areas by PEA does not convert these inalienable natural resources of the State into alienable or disposable lands of the public domain. There must be a law or presidential proclamation officially classifying these reclaimed lands as alienable or disposable and open to disposition or concession. Moreover, these reclaimed lands cannot be classified as alienable or disposable if the law has reserved them for some public or quasi-public use.[71]

Section 8 of CA No. 141 provides that only those lands shall be declared open to disposition or concession which have been officially delimited and classified.[72] The President has the authority to classify inalienable lands of the public domain into alienable or disposable lands of the public domain, pursuant to Section 6 of CA No. 141. In Laurel vs. Garcia,[73] the Executive Department attempted to sell the Roppongi property in Tokyo, Japan, which was acquired by the Philippine Government for use as the Chancery of the Philippine Embassy.Although the Chancery had transferred to another location thirteen years earlier, the Court still ruled that, under Article 422[74] of the Civil Code, a property of public dominion retains such character until  formally declared otherwise. The Court ruled thatThe fact that the Roppongi site has not been used for a long time for actual Embassy service does not automatically convert it to patrimonial property. Any such conversion happens only if the property is withdrawn from public use (Cebu Oxygen and Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]. A property continues to be part of the public domain, not available for private appropriation or ownership until there is a formal declaration on the part of the government to withdraw it from being such (Ignacio v. Director of Lands, 108 Phil. 335 [1960]. (Emphasis supplied)

PD No. 1085, issued on February 4, 1977, authorized the issuance of special land patents for lands reclaimed by PEA from the foreshore or submerged areas of Manila Bay. On January 19, 1988 then President Corazon C. Aquino issued Special Patent No. 3517 in the name of PEA for the 157.84 hectares comprising the partially reclaimed Freedom Islands. Subsequently, on April 9, 1999 the Register of Deeds of the Municipality of Paranaque issued TCT Nos. 7309, 7311 and 7312 in the name of PEA pursuant to Section 103 of PD No. 1529 authorizing the issuance of certificates

of title corresponding to land patents. To this day, these certificates of title are still in the name of PEA.

PD No. 1085, coupled with President Aquinos actual issuance of a special patent covering the Freedom Islands, is equivalent to an official proclamation classifying the Freedom Islands as alienable or disposable lands of the public domain. PD No. 1085 and President Aquinos issuance of a land patent also constitute a declaration that the Freedom Islands are no longer needed for public service. The Freedom Islands are thus alienable or disposable lands of the public domain, open to disposition or concession to qualified parties.

At the time then President Aquino issued Special Patent No. 3517, PEA had already reclaimed the Freedom Islands although subsequently there were partial erosions on some areas. The government had also completed the necessary surveys on these islands.Thus, the Freedom Islands were no longer part of Manila Bay but part of the land mass. Section 3, Article XII of the 1987 Constitution classifies lands of the public domain into agricultural, forest or timber, mineral lands, and national parks. Being neither timber, mineral, nor national park lands, the reclaimed Freedom Islands necessarily fall under the classification of agricultural lands of the public domain.Under the 1987 Constitution, agricultural lands of the public domain are the only natural resources that the State may alienate to qualified private parties. All other natural resources, such as the seas or bays, are waters x x x owned by the State forming part of the public domain, and are inalienable pursuant to Section 2, Article XII of the 1987 Constitution.

AMARI claims that the Freedom Islands are private lands because CDCP, then a private corporation, reclaimed the islands under a contract dated November 20, 1973 with the Commissioner of Public Highways. AMARI, citing Article 5 of the Spanish Law of Waters of 1866, argues that if the ownership of reclaimed lands may be given to the party constructing the works, then it cannot be said that reclaimed lands are lands of the public domain which the State may not alienate.[75] Article 5 of the Spanish Law of Waters reads as follows:

Article 5. Lands reclaimed from the sea in consequence of works constructed by the State, or by the provinces, pueblos or private persons, with proper permission, shall become the property of the party constructing such works, unless otherwise provided by the terms of the grant of authority. (Emphasis supplied)

Under Article 5 of the Spanish Law of Waters of 1866, private parties could reclaim from the sea only with proper permission from the State. Private parties could own the reclaimed land only if not otherwise provided by the terms of the grant of authority. This clearly meant that no one could reclaim from the sea without permission from the State because the sea is property of public dominion. It also meant that the State could grant or withhold ownership of the reclaimed land because any reclaimed land, like the sea from which it emerged, belonged to the State. Thus, a private person reclaiming from the sea without permission from the State could not acquire ownership of the reclaimed land which would remain property of public dominion like the sea it replaced.[76] Article 5 of the Spanish Law of Waters of 1866 adopted the time-honored principle of land ownership that all lands that were not acquired from the government, either by purchase or by grant, belong to the public domain.[77]

Article 5 of the Spanish Law of Waters must be read together with laws subsequently enacted on the disposition of public lands. In particular, CA No. 141 requires that lands of the public domain must first be classified as alienable or disposable before the government can alienate them. These

lands must not be reserved for public or quasi-public purposes.[78] Moreover, the contract between CDCP and the government was executed after the effectivity of the 1973 Constitution which barred private corporations from acquiring any kind of alienable land of the public domain. This contract could not have converted the Freedom Islands into private lands of a private corporation.

Presidential Decree No. 3-A, issued on January 11, 1973, revoked all laws authorizing the reclamation of areas under water and revested solely in the National Government the power to reclaim lands. Section 1 of PD No. 3-A declared thatThe provisions of any law to the contrary notwithstanding, the reclamation of areas under water, whether foreshore or inland, shall be limited to the National Government or any person authorized by it under a proper contract. (Emphasis supplied)x x x.

PD No. 3-A repealed Section 5 of the Spanish Law of Waters of 1866 because reclamation of areas under water could now be undertaken only by the National Government or by a person contracted by the National Government. Private parties may reclaim from the sea only under a contract with the National Government, and no longer by grant or permission as provided in Section 5 of the Spanish Law of Waters of 1866.

Executive Order No. 525, issued on February 14, 1979, designated PEA as the National Governments implementing arm to undertake all reclamation projects of the government, which shall be undertaken by the PEA or through a proper contract executed by it with any person or entity. Under such contract, a private party receives compensation for reclamation services rendered to PEA. Payment to the contractor may be in cash, or in kind consisting of portions of the reclaimed land, subject to the constitutional ban on private corporations from acquiring alienable lands of the public domain. The reclaimed land can be used as payment in kind only if the reclaimed land is first classified as alienable or disposable land open to disposition, and then declared no longer needed for public service.

The Amended JVA covers not only the Freedom Islands, but also an additional 592.15 hectares which are still submerged and forming part of Manila Bay. There is no legislative or Presidential act classifying these submerged areas as alienable or disposable lands of the public domain open to disposition. These submerged areas are not covered by any patent or certificate of title. There can be no dispute that these submerged areas form part of the public domain, and in their present state are inalienable and outside the commerce of man. Until reclaimed from the sea, these submerged areas are, under the Constitution, waters x x x owned by the State, forming part of the public domain and consequently inalienable. Only when actually reclaimed from the sea can these submerged areas be classified as public agricultural lands, which under the Constitution are the only natural resources that the State may alienate. Once reclaimed and transformed into public agricultural lands, the government may then officially classify these lands as alienable or disposable lands open to disposition. Thereafter, the government may declare these lands no longer needed for public service. Only then can these reclaimed lands be considered alienable or disposable lands of the public domain and within the commerce of man.

The classification of PEAs reclaimed foreshore and submerged lands into alienable or disposable lands open to disposition is necessary because PEA is tasked under its charter to

undertake public services that require the use of lands of the public domain. Under Section 5 of PD No. 1084, the functions of PEA include the following: [T]o own or operate railroads, tramways and other kinds of land transportation, x x x; [T]o construct, maintain and operate such systems of sanitary sewers as may be necessary; [T]o construct, maintain and operate such storm drains as may be necessary. PEA is empowered to issue rules and regulations as may be necessary for the proper use by private parties of any or all of the highways, roads, utilities, buildings and/or any of its properties and to impose or collect fees or tolls for their use. Thus, part of the reclaimed foreshore and submerged lands held by the PEA would actually be needed for public use or service since many of the functions imposed on PEA by its charter constitute essential public services.

Moreover, Section 1 of Executive Order No. 525 provides that PEA shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. The same section also states that [A]ll reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; x x x. Thus, under EO No. 525, in relation to PD No. 3-A and PD No.1084, PEA became the primary implementing agency of the National Government to reclaim foreshore and submerged lands of the public domain. EO No. 525 recognized PEA as the government entity to undertake the reclamation of lands and ensure their maximum utilization in promoting public welfare and interests.[79] Since large portions of these reclaimed lands would obviously be needed for public service, there must be a formal declaration segregating reclaimed lands no longer needed for public service from those still needed for public service.

Section 3 of EO No. 525, by declaring that all lands reclaimed by PEA shall belong to or be owned by the PEA, could not automatically operate to classify inalienable lands into alienable or disposable lands of the public domain. Otherwise, reclaimed foreshore and submerged lands of the public domain would automatically become alienable once reclaimed by PEA, whether or not classified as alienable or disposable.

The Revised Administrative Code of 1987, a later law than either PD No. 1084 or EO No. 525, vests in the Department of Environment and Natural Resources (DENR for brevity) the following powers and functions:Sec. 4. Powers and Functions. The Department shall:(1) x x xx x x(4) Exercise supervision and control over forest lands, alienable and disposable public lands, mineral resources and, in the process of exercising such control, impose appropriate taxes, fees, charges, rentals and any such form of levy and collect such revenues for the exploration, development, utilization or gathering of such resources;x x x(14) Promulgate rules, regulations and guidelines on the issuance of licenses, permits, concessions, lease agreements and such other privileges concerning the development, exploration and utilization of the countrys marine, freshwater, and brackish water and over all aquatic resources of the country and shall continue to oversee, supervise and

police our natural resources; cancel or cause to cancel such privileges upon failure, non-compliance or violations of any regulation, order, and for all other causes which are in furtherance of the conservation of natural resources and supportive of the national interest;(15) Exercise exclusive jurisdiction on the management and disposition of all lands of the public domain and serve as the sole agency responsible for classification, sub-classification, surveying and titling of lands in consultation with appropriate agencies.[80] (Emphasis supplied)

As manager, conservator and overseer of the natural resources of the State, DENR exercises supervision and control over alienable and disposable public lands. DENR also exercises exclusive jurisdiction on the management and disposition of all lands of the public domain. Thus, DENR decides whether areas under water, like foreshore or submerged areas of Manila Bay, should be reclaimed or not.This means that PEA needs authorization from DENR before PEA can undertake reclamation projects in Manila Bay, or in any part of the country.

DENR also exercises exclusive jurisdiction over the disposition of all lands of the public domain. Hence, DENR decides whether reclaimed lands of PEA should be classified as alienable under Sections 6[81] and 7[82] of CA No. 141. Once DENR decides that the reclaimed lands should be so classified, it then recommends to the President the issuance of a proclamation classifying the lands as alienable or disposable lands of the public domain open to disposition. We note that then DENR Secretary Fulgencio S. Factoran, Jr. countersigned Special Patent No. 3517 in compliance with the Revised Administrative Code and Sections 6 and 7 of CA No. 141.

In short, DENR is vested with the power to authorize the reclamation of areas under water, while PEA is vested with the power to undertake the physical reclamation of areas under water, whether directly or through private contractors. DENR is also empowered to classify lands of the public domain into alienable or disposable lands subject to the approval of the President. On the other hand, PEA is tasked to develop, sell or lease the reclaimed alienable lands of the public domain.

Clearly, the mere physical act of reclamation by PEA of foreshore or submerged areas does not make the reclaimed lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA. Likewise, the mere transfer by the National Government of lands of the public domain to PEA does not make the lands alienable or disposable lands of the public domain, much less patrimonial lands of PEA.

Absent two official acts a classification that these lands are alienable or disposable and open to disposition and a declaration that these lands are not needed for public service, lands reclaimed by PEA remain inalienable lands of the public domain. Only such an official classification and formal declaration can convert reclaimed lands into alienable or disposable lands of the public domain, open to disposition under the Constitution, Title I and Title III[83] of CA No. 141 and other applicable laws.[84]

PEAs Authority to Sell Reclaimed Lands

PEA, like the Legal Task Force, argues that as alienable or disposable lands of the public domain, the reclaimed lands shall be disposed of in accordance with CA No. 141, the Public Land Act. PEA, citing Section 60 of CA No. 141, admits that reclaimed lands transferred to a branch or subdivision of the government shall not be alienated, encumbered, or otherwise disposed of in a manner affecting its title, except when authorized by Congress: x x x.[85] (Emphasis by PEA)

In Laurel vs. Garcia,[86] the Court cited Section 48 of the Revised Administrative Code of 1987, which states that

Sec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following: x x x.

Thus, the Court concluded that a law is needed to convey any real property belonging to the Government. The Court declared that -It is not for the President to convey real property of the government on his or her own sole will. Any such conveyance must be authorized and approved by a law enacted by the Congress. It requires executive and legislative concurrence. (Emphasis supplied)

PEA contends that PD No. 1085 and EO No. 525 constitute the legislative authority allowing PEA to sell its reclaimed lands. PD No. 1085, issued on February 4, 1977, provides that

The land reclaimed in the foreshore and offshore area of Manila Bay pursuant to the contract for the reclamation and construction of the Manila-Cavite Coastal Road Project between the Republic of the Philippines and the Construction and Development Corporation of the Philippines dated November 20, 1973 and/or any other contract or reclamation covering the same area is hereby transferred, conveyed and assigned to the ownership and administration of the Public Estates Authority established pursuant to PD No. 1084; Provided, however, That the rights and interests of the Construction and Development Corporation of the Philippines pursuant to the aforesaid contract shall be recognized and respected.Henceforth, the Public Estates Authority shall exercise the rights and assume the obligations of the Republic of the Philippines (Department of Public Highways) arising from, or incident to, the aforesaid contract between the Republic of the Philippines and the Construction and Development Corporation of the Philippines.In consideration of the foregoing transfer and assignment, the Public Estates Authority shall issue in favor of the Republic of the Philippines the corresponding shares of stock in said entity with an issued value of said shares of stock (which) shall be deemed fully paid and non-assessable.The Secretary of Public Highways and the General Manager of the Public Estates Authority shall execute such contracts or agreements, including appropriate agreements with the Construction and Development Corporation of the Philippines, as may be necessary to implement the above.Special land patent/patents shall be issued by the Secretary of Natural Resources in favor of the Public Estates Authority without prejudice to the subsequent transfer to the contractor or his assignees of such portion or portions of the land reclaimed or to be reclaimed as provided for in the above-mentioned contract. On the basis of such patents, the Land Registration Commission shall issue the corresponding certificate of title. (Emphasis supplied)

On the other hand, Section 3 of EO No. 525, issued on February 14, 1979, provides that -

Sec. 3. All lands reclaimed by PEA shall belong to or be owned by the PEA which shall be responsible for its administration, development, utilization or disposition in accordance with the provisions of Presidential Decree No. 1084. Any and all income that the PEA may derive from the sale, lease or use of reclaimed lands shall be used in accordance with the provisions of Presidential Decree No. 1084.

There is no express authority under either PD No. 1085 or EO No. 525 for PEA to sell its reclaimed lands. PD No. 1085 merely transferred ownership and administration of lands reclaimed from Manila Bay to PEA, while EO No. 525 declared that lands reclaimed by PEA shall belong to or be owned by PEA. EO No. 525 expressly states that PEA should dispose of its reclaimed lands in accordance with the provisions of Presidential Decree No. 1084, the charter of PEA.

PEAs charter, however, expressly tasks PEA to develop, improve, acquire, administer, deal in, subdivide, dispose, lease and sell any and all kinds of lands x x x owned, managed, controlled and/or operated by the government.[87] (Emphasis supplied) There is, therefore, legislative authority granted to PEA to sell its lands, whether patrimonial or alienable lands of the public domain. PEA may sell to private parties its patrimonial properties in accordance with the PEA charter free from constitutional limitations. The constitutional ban on private corporations from acquiring alienable lands of the public domain does not apply to the sale of PEAs patrimonial lands.

PEA may also sell its alienable or disposable lands of the public domain to private individuals since, with the legislative authority, there is no longer any statutory prohibition against such sales and the constitutional ban does not apply to individuals. PEA, however, cannot sell anyof its alienable or disposable lands of the public domain to private corporations since Section 3, Article XII of the 1987 Constitution expressly prohibits such sales. The legislative authority benefits only individuals. Private corporations remain barred from acquiring any kind of alienable land of the public domain, including government reclaimed lands.

The provision in PD No. 1085 stating that portions of the reclaimed lands could be transferred by PEA to the contractor or hisassignees (Emphasis supplied) would not apply to private corporations but only to individuals because of the constitutional ban.Otherwise, the provisions of PD No. 1085 would violate both the 1973 and 1987 Constitutions.

The requirement of public auction in the sale of reclaimed lands

Assuming the reclaimed lands of PEA are classified as alienable or disposable lands open to disposition, and further declared no longer needed for public service, PEA would have to conduct a public bidding in selling or leasing these lands. PEA must observe the provisions of Sections 63 and 67 of CA No. 141 requiring public auction, in the absence of a law exempting PEA from holding a public auction.[88] Special Patent No. 3517 expressly states that the patent is issued by authority of the Constitution and PD No. 1084, supplemented by Commonwealth Act No. 141, as amended. This is an acknowledgment that the provisions of CA No. 141 apply to the disposition of reclaimed alienable lands of the public domain unless otherwise provided by law. Executive Order No. 654,

[89] which authorizes PEA to determine the kind and manner of payment for the transfer of its assets and properties, does not exempt PEA from the requirement of public auction. EO No. 654 merely authorizes PEA to decide the mode of payment, whether in kind and in installment, but does not authorize PEA to dispense with public auction.

Moreover, under Section 79 of PD No. 1445, otherwise known as the Government Auditing Code, the government is required to sell valuable government property through public bidding. Section 79 of PD No. 1445 mandates that

Section 79. When government property has become unserviceable for any cause, or is no longer needed, it shall, upon application of the officer accountable therefor, be inspected by the head of the agency or his duly authorized representative in the presence of the auditor concerned and, if found to be valueless or unsaleable, it may be destroyed in their presence. If found to be valuable, it may be sold at public auction to the highest bidder under the supervision of the proper committee on award or similar body in the presence of the auditor concerned or other authorized representative of the Commission, after advertising by printed notice in the Official Gazette, or for not less than three consecutive days in any newspaper of general circulation, or where the value of the property does not warrant the expense of publication, by notices posted for a like period in at least three public places in the locality where the property is to be sold. In the event that the public auction fails, the property may be sold at a private sale at such price as may be fixed by the same committee or body concerned and approved by the Commission.

It is only when the public auction fails that a negotiated sale is allowed, in which case the Commission on Audit must approve the selling price.[90] The Commission on Audit implements Section 79 of the Government Auditing Code through Circular No. 89-296[91] dated January 27, 1989. This circular emphasizes that government assets must be disposed of only through public auction, and a negotiated sale can be resorted to only in case of failure of public auction.

At the public auction sale, only Philippine citizens are qualified to bid for PEAs reclaimed foreshore and submerged alienable lands of the public domain. Private corporations are barred from bidding at the auction sale of any kind of alienable land of the public domain.

PEA originally scheduled a public bidding for the Freedom Islands on December 10, 1991. PEA imposed a condition that the winning bidder should reclaim another 250 hectares of submerged areas to regularize the shape of the Freedom Islands, under a 60-40 sharing of the additional reclaimed areas in favor of the winning bidder.[92] No one, however, submitted a bid. On December 23, 1994, the Government Corporate Counsel advised PEA it could sell the Freedom Islands through negotiation, without need of another public bidding, because of the failure of the public bidding on December 10, 1991.[93]

However, the original JVA dated April 25, 1995 covered not only the Freedom Islands and the additional 250 hectares still to be reclaimed, it also granted an option to AMARI to reclaim another 350 hectares. The original JVA, a negotiated contract, enlarged the reclamation area to 750 hectares.[94] The failure of public bidding on December 10, 1991, involving only 407.84 hectares,[95] is not a valid justification for a negotiated sale of 750 hectares, almost double the area publicly auctioned. Besides, the failure of public bidding happened on December 10, 1991, more than three years before the signing of the original JVA on April 25, 1995. The economic situation in the country had greatly improved during the intervening period.

Reclamation under the BOT Law and the Local Government Code

The constitutional prohibition in Section 3, Article XII of the 1987 Constitution is absolute and clear: Private corporations or associations may not hold such alienable lands of the public domain except by lease, x x x. Even Republic Act No. 6957 (BOT Law, for brevity), cited by PEA and AMARI as legislative authority to sell reclaimed lands to private parties, recognizes the constitutional ban.Section 6 of RA No. 6957 statesSec. 6. Repayment Scheme. - For the financing, construction, operation and maintenance of any infrastructure projects undertaken through the build-operate-and-transfer arrangement or any of its variations pursuant to the provisions of this Act, the project proponent x x x may likewise be repaid in the form of a share in the revenue of the project or other non-monetary payments, such as, but not limited to, the grant of a portion or percentage of the reclaimed land, subject to the constitutional requirements with respect to the ownership of the land: x x x. (Emphasis supplied)

A private corporation, even one that undertakes the physical reclamation of a government BOT project, cannot acquire reclaimed alienable lands of the public domain in view of the constitutional ban.

Section 302 of the Local Government Code, also mentioned by PEA and AMARI, authorizes local governments in land reclamation projects to pay the contractor or developer in kind consisting of a percentage of the reclaimed land, to wit:

Section 302. Financing, Construction, Maintenance, Operation, and Management of Infrastructure Projects by the Private Sector. x x xx x xIn case of land reclamation or construction of industrial estates, the repayment plan may consist of the grant of a portion or percentage of the reclaimed land or the industrial estate constructed.

Although Section 302 of the Local Government Code does not contain a proviso similar to that of the BOT Law, the constitutional restrictions on land ownership automatically apply even though not expressly mentioned in the Local Government Code.

Thus, under either the BOT Law or the Local Government Code, the contractor or developer, if a corporate entity, can only be paid with leaseholds on portions of the reclaimed land. If the contractor or developer is an individual, portions of the reclaimed land, not exceeding 12 hectares[96] of non-agricultural lands, may be conveyed to him in ownership in view of the legislative authority allowing such conveyance. This is the only way these provisions of the BOT Law and the Local Government Code can avoid a direct collision with Section 3, Article XII of the 1987 Constitution.

Registration of lands of the public domain

Finally, PEA theorizes that the act of conveying the ownership of the reclaimed lands to public respondent PEA transformed such lands of the public domain to private lands. This theory is echoed by AMARI which maintains that the issuance of the special patent leading to the eventual issuance of title takes the subject land away from the land of public domain and converts the property into patrimonial or private property. In short, PEA and AMARI contend that with the issuance of Special Patent No. 3517 and the corresponding certificates of titles, the 157.84 hectares comprising the Freedom Islands have become private lands of PEA. In support of their theory, PEA and AMARI cite the following rulings of the Court:

1. Sumail v. Judge of CFI of Cotabato,[97] where the Court held

Once the patent was granted and the corresponding certificate of title was issued, the land ceased to be part of the public domain and became private property over which the Director of Lands has neither control nor jurisdiction.

2. Lee Hong Hok v. David,[98] where the Court declared -

After the registration and issuance of the certificate and duplicate certificate of title based on a public land patent, the land covered thereby automatically comes under the operation of Republic Act 496 subject to all the safeguards provided therein.

3. Heirs of Gregorio Tengco v. Heirs of Jose Aliwalas,[99] where the Court ruled -

While the Director of Lands has the power to review homestead patents, he may do so only so long as the land remains part of the public domain and continues to be under his exclusive control; but once the patent is registered and a certificate of title is issued, the land ceases to be part of the public domain and becomes private property over which the Director of Lands has neither control nor jurisdiction.

4. Manalo v. Intermediate Appellate Court,[100] where the Court held

When the lots in dispute were certified as disposable on May 19, 1971, and free patents were issued covering the same in favor of the private respondents, the said lots ceased to be part of the public domain and, therefore, the Director of Lands lost jurisdiction over the same.

5.Republic v. Court of Appeals,[101] where the Court stated

Proclamation No. 350, dated October 9, 1956, of President Magsaysay legally effected a land grant to the Mindanao Medical Center, Bureau of Medical Services, Department of Health, of the whole lot, validly sufficient for initial registration under the Land Registration Act. Such land grant is constitutive of a fee simple title or absolute title in favor of petitioner Mindanao Medical Center. Thus, Section 122 of the Act, which governs the registration of grants or patents involving public lands, provides that Whenever public lands in the Philippine Islands belonging to the Government of the United States or to the Government of the Philippines are alienated, granted or conveyed to persons or to public or private corporations, the same shall be brought

forthwith under the operation of this Act (Land Registration Act, Act 496) and shall become registered lands.

The first four cases cited involve petitions to cancel the land patents and the corresponding certificates of titles issued to private parties. These four cases uniformly hold that the Director of Lands has no jurisdiction over private lands or that upon issuance of the certificate of title the land automatically comes under the Torrens System. The fifth case cited involves the registration under the Torrens System of a 12.8-hectare public land granted by the National Government to Mindanao Medical Center, a government unit under the Department of Health. The National Government transferred the 12.8-hectare public land to serve as the site for the hospital buildings and other facilities of Mindanao Medical Center, which performed a public service. The Court affirmed the registration of the 12.8-hectare public land in the name of Mindanao Medical Center under Section 122 of Act No. 496. This fifth case is an example of a public land being registered under Act No. 496 without the land losing its character as a property of public dominion.

In the instant case, the only patent and certificates of title issued are those in the name of PEA, a wholly government owned corporation performing public as well as proprietary functions. No patent or certificate of title has been issued to any private party. No one is asking the Director of Lands to cancel PEAs patent or certificates of title. In fact, the thrust of the instant petition is that PEAs certificates of title should remain with PEA, and the land covered by these certificates, being alienable lands of the public domain, should not be sold to a private corporation.

Registration of land under Act No. 496 or PD No. 1529 does not vest in the registrant private or public ownership of the land.Registration is not a mode of acquiring ownership but is merely evidence of ownership previously conferred by any of the recognized modes of acquiring ownership. Registration does not give the registrant a better right than what the registrant had prior to the registration.[102] The registration of lands of the public domain under the Torrens system, by itself, cannot convert public lands into private lands.[103]

Jurisprudence holding that upon the grant of the patent or issuance of the certificate of title the alienable land of the public domain automatically becomes private land cannot apply to government units and entities like PEA. The transfer of the Freedom Islands to PEA was made subject to the provisions of CA No. 141 as expressly stated in Special Patent No. 3517 issued by then President Aquino, to wit:NOW, THEREFORE, KNOW YE, that by authority of the Constitution of the Philippines and in conformity with the provisions of Presidential Decree No. 1084, supplemented by Commonwealth Act No. 141, as amended, there are hereby granted and conveyed unto the Public Estates Authority the aforesaid tracts of land containing a total area of one million nine hundred fifteen thousand eight hundred ninety four (1,915,894) square meters; the technical description of which are hereto attached and made an integral part hereof. (Emphasis supplied)

Thus, the provisions of CA No. 141 apply to the Freedom Islands on matters not covered by PD No. 1084. Section 60 of CA No. 141 prohibits, except when authorized by Congress, the sale of alienable lands of the public domain that are transferred to government units or entities. Section 60 of CA No. 141 constitutes, under Section 44 of PD No. 1529, a statutory lien affecting title of the registered land even if not annotated on the certificate of title.[104] Alienable lands of the public domain held by government entities under Section 60 of CA No. 141 remain public lands because they cannot be alienated or encumbered unless Congress passes a law authorizing their

disposition. Congress, however, cannot authorize the sale to private corporations of reclaimed alienable lands of the public domain because of the constitutional ban. Only individuals can benefit from such law.

The grant of legislative authority to sell public lands in accordance with Section 60 of CA No. 141 does not automatically convert alienable lands of the public domain into private or patrimonial lands. The alienable lands of the public domain must be transferred to qualified private parties, or to government entities not tasked to dispose of public lands, before these lands can become private or patrimonial lands. Otherwise, the constitutional ban will become illusory if Congress can declare lands of the public domain as private or patrimonial lands in the hands of a government agency tasked to dispose of public lands. This will allow private corporations to acquire directly from government agencies limitless areas of lands which, prior to such law, are concededly public lands.

Under EO No. 525, PEA became the central implementing agency of the National Government to reclaim foreshore and submerged areas of the public domain. Thus, EO No. 525 declares that

EXECUTIVE ORDER NO. 525Designating the Public Estates Authority as the Agency Primarily Responsible for all Reclamation

ProjectsWhereas, there are several reclamation projects which are ongoing or being proposed to be undertaken in various parts of the country which need to be evaluated for consistency with national programs;Whereas, there is a need to give further institutional support to the Governments declared policy to provide for a coordinated, economical and efficient reclamation of lands;Whereas, Presidential Decree No. 3-A requires that all reclamation of areas shall be limited to the National Government or any person authorized by it under proper contract;Whereas, a central authority is needed to act on behalf of the National Government which shall ensure a coordinated and integrated approach in the reclamation of lands;Whereas, Presidential Decree No. 1084 creates the Public Estates Authority as a government corporation to undertake reclamation of lands and ensure their maximum utilization in promoting public welfare and interests; andWhereas, Presidential Decree No. 1416 provides the President with continuing authority to reorganize the national government including the transfer, abolition, or merger of functions and offices.NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines, by virtue of the powers vested in me by the Constitution and pursuant to Presidential Decree No. 1416, do hereby order and direct the following:Section 1. The Public Estates Authority (PEA) shall be primarily responsible for integrating, directing, and coordinating all reclamation projects for and on behalf of the National Government. All reclamation projects shall be approved by the President upon recommendation of the PEA, and shall be undertaken by the PEA or through a proper contract executed by it with any person or entity; Provided, that, reclamation projects of any national

government agency or entity authorized under its charter shall be undertaken in consultation with the PEA upon approval of the President.x x x .

As the central implementing agency tasked to undertake reclamation projects nationwide, with authority to sell reclaimed lands, PEA took the place of DENR as the government agency charged with leasing or selling reclaimed lands of the public domain. The reclaimed lands being leased or sold by PEA are not private lands, in the same manner that DENR, when it disposes of other alienable lands, does not dispose of private lands but alienable lands of the public domain. Only when qualified private parties acquire these lands will the lands become private lands. In the hands of the government agency tasked and authorized to dispose of alienable of disposable lands of the public domain, these lands are still public, not private lands.

Furthermore, PEAs charter expressly states that PEA shall hold lands of the public domain as well as any and all kinds of lands. PEA can hold both lands of the public domain and private lands. Thus, the mere fact that alienable lands of the public domain like the Freedom Islands are transferred to PEA and issued land patents or certificates of title in PEAs name does not automatically make such lands private.

To allow vast areas of reclaimed lands of the public domain to be transferred to PEA as private lands will sanction a gross violation of the constitutional ban on private corporations from acquiring any kind of alienable land of the public domain. PEA will simply turn around,as PEA has now done under the Amended JVA, and transfer several hundreds of hectares of these reclaimed and still to be reclaimed lands to a single private corporation in only one transaction. This scheme will effectively nullify the constitutional ban in Section 3, Article XII of the 1987 Constitution which was intended to diffuse equitably the ownership of alienable lands of the public domain among Filipinos, now numbering over 80 million strong.

This scheme, if allowed, can even be applied to alienable agricultural lands of the public domain since PEA can acquire x x x any and all kinds of lands. This will open the floodgates to corporations and even individuals acquiring hundreds of hectares of alienable lands of the public domain under the guise that in the hands of PEA these lands are private lands.  This will result in corporations amassing huge landholdings never before seen in this country - creating the very evil that the constitutional ban was designed to prevent. This will completely reverse the clear direction of constitutional development in this country. The 1935 Constitution allowed private corporations to acquire not more than 1,024 hectares of public lands.[105] The 1973 Constitution prohibited private corporations from acquiring any kind of public land, and the 1987 Constitution has unequivocally reiterated this prohibition.

The contention of PEA and AMARI that public lands, once registered under Act No. 496 or PD No. 1529, automatically become private lands is contrary to existing laws. Several laws authorize lands of the public domain to be registered under the Torrens System or Act No. 496, now PD No. 1529, without losing their character as public lands. Section 122 of Act No. 496, and Section 103 of PD No. 1529, respectively, provide as follows:Act No. 496

Sec. 122. Whenever public lands in the Philippine Islands belonging to the x x x Government of the Philippine Islands are alienated, granted, or conveyed to persons or the public or private corporations, the same shall be brought forthwith under the operation of this Act and shall become registered lands.PD No. 1529Sec. 103. Certificate of Title to Patents. Whenever public land is by the Government alienated, granted or conveyed to any person, the same shall be brought forthwith under the operation of this Decree. (Emphasis supplied)

Based on its legislative history, the phrase conveyed to any person in Section 103 of PD No. 1529 includes conveyances of public lands to public corporations.

Alienable lands of the public domain granted, donated, or transferred to a province, municipality, or branch or subdivision of the Government, as provided in Section 60 of CA No. 141, may be registered under the Torrens System pursuant to Section 103 of PD No. 1529. Such registration, however, is expressly subject to the condition in Section 60 of CA No. 141 that the land shall not be alienated, encumbered or otherwise disposed of in a manner affecting its title, except when authorized by Congress. This provision refers to government reclaimed, foreshore and marshy lands of the public domain that have been titled but still cannot be alienated or encumbered unless expressly authorized by Congress. The need for legislative authority prevents the registered land of the public domain from becoming private land that can be disposed of to qualified private parties.

The Revised Administrative Code of 1987 also recognizes that lands of the public domain may be registered under the Torrens System.Section 48, Chapter 12, Book I of the Code statesSec. 48. Official Authorized to Convey Real Property. Whenever real property of the Government is authorized by law to be conveyed, the deed of conveyance shall be executed in behalf of the government by the following:(1) x x x(2) For property belonging to the Republic of the Philippines, but titled in the name of any political subdivision or of any corporate agency or instrumentality, by the executive head of the agency or instrumentality. (Emphasis supplied)

Thus, private property purchased by the National Government for expansion of a public wharf may be titled in the name of a government corporation regulating port operations in the country. Private property purchased by the National Government for expansion of an airport may also be titled in the name of the government agency tasked to administer the airport. Private property donated to a municipality for use as a town plaza or public school site may likewise be titled in the name of the municipality.[106] All these properties become properties of the public domain, and if already registered under Act No. 496 or PD No. 1529, remain registered land. There is no requirement or provision in any existing law for the de-registration of land from the Torrens System.

Private lands taken by the Government for public use under its power of eminent domain become unquestionably part of the public domain. Nevertheless, Section 85 of PD No. 1529

authorizes the Register of Deeds to issue in the name of the National Government new certificates of title covering such expropriated lands. Section 85 of PD No. 1529 statesSec. 85. Land taken by eminent domain. Whenever any registered land, or interest therein, is expropriated or taken by eminent domain, the National Government, province, city or municipality, or any other agency or instrumentality exercising such right shall file for registration in the proper Registry a certified copy of the judgment which shall state definitely by an adequate description, the particular property or interest expropriated, the number of the certificate of title, and the nature of the public use. A memorandum of the right or interest taken shall be made on each certificate of title by the Register of Deeds, and where the fee simple is taken, a new certificate shall be issued in favor of the National Government, province, city, municipality, or any other agency or instrumentality exercising such right for the land so taken. The legal expenses incident to the memorandum of registration or issuance of a new certificate of title shall be for the account of the authority taking the land or interest therein. (Emphasis supplied)

Consequently, lands registered under Act No. 496 or PD No. 1529 are not exclusively private or patrimonial lands. Lands of the public domain may also be registered pursuant to existing laws.

AMARI makes a parting shot that the Amended JVA is not a sale to AMARI of the Freedom Islands or of the lands to be reclaimed from submerged areas of Manila Bay. In the words of AMARI, the Amended JVA is not a sale but a joint venture with a stipulation for reimbursement of the original cost incurred by PEA for the earlier reclamation and construction works performed by the CDCP under its 1973 contract with the Republic. Whether the Amended JVA is a sale or a joint venture, the fact remains that the Amended JVA requires PEA to cause the issuance and delivery of the certificates of title conveying AMARIs Land Share in the name of AMARI.[107]

This stipulation still contravenes Section 3, Article XII of the 1987 Constitution which provides that private corporations shall not holdsuch alienable lands of the public domain except by lease. The transfer of title and ownership to AMARI clearly means that AMARI will hold the reclaimed lands other than by lease. The transfer of title and ownership is a disposition of the reclaimed lands, a transaction considered a sale or alienation under CA No. 141,[108] the Government Auditing Code,[109] and Section 3, Article XII of the 1987 Constitution.

The Regalian doctrine is deeply implanted in our legal system. Foreshore and submerged areas form part of the public domain and are inalienable. Lands reclaimed from foreshore and submerged areas also form part of the public domain and are also inalienable, unless converted pursuant to law into alienable or disposable lands of the public domain. Historically, lands reclaimed by the government are sui generis, not available for sale to private parties unlike other alienable public lands. Reclaimed lands retain their inherent potential as areas for public use or public service. Alienable lands of the public domain, increasingly becoming scarce natural resources, are to be distributed equitably among our ever-growing population. To insure such equitable distribution, the 1973 and 1987 Constitutions have barred private corporations from acquiring any kind of alienable land of the public domain. Those who attempt to dispose of inalienable natural resources of the State, or seek to circumvent the constitutional ban on alienation of lands of the public domain to private corporations, do so at their own risk.

We can now summarize our conclusions as follows:

1. The 157.84 hectares of reclaimed lands comprising the Freedom Islands, now covered by certificates of title in the name of PEA, are alienable lands of the public domain. PEA may lease these lands to private corporations but may not sell or transfer ownership of these lands to private corporations. PEA may only sell these lands to Philippine citizens, subject to the ownership limitations in the 1987 Constitution and existing laws.

2. The 592.15 hectares of submerged areas of Manila Bay remain inalienable natural resources of the public domain until classified as alienable or disposable lands open to disposition and declared no longer needed for public service. The government can make such classification and declaration only after PEA has reclaimed these submerged areas. Only then can these lands qualify as agricultural lands of the public domain, which are the only natural resources the government can alienate. In their present state, the 592.15 hectares of submerged areas are inalienable and outside the commerce of man.

3. Since the Amended JVA seeks to transfer to AMARI, a private corporation, ownership of 77.34 hectares[110] of the Freedom Islands, such transfer is void for being contrary to Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

4. Since the Amended JVA also seeks to transfer to AMARI ownership of 290.156 hectares[111] of still submerged areas of Manila Bay, such transfer is void for being contrary to Section 2, Article XII of the 1987 Constitution which prohibits the alienation of natural resources other than agricultural lands of the public domain. PEA may reclaim these submerged areas. Thereafter, the government can classify the reclaimed lands as alienable or disposable, and further declare them no longer needed for public service. Still, the transfer of such reclaimed alienable lands of the public domain to AMARI will be void in view of Section 3, Article XII of the 1987 Constitution which prohibits private corporations from acquiring any kind of alienable land of the public domain.

Clearly, the Amended JVA violates glaringly Sections 2 and 3, Article XII of the 1987 Constitution. Under Article 1409[112] of the Civil Code, contracts whose object or purpose is contrary to law, or whose object is outside the commerce of men, are inexistent and void from the beginning. The Court must perform its duty to defend and uphold the Constitution, and therefore declares the Amended JVA null and void ab initio.

Seventh issue: whether the Court is the proper forum to raise the issue of whether the Amended JVA is grossly disadvantageous to the government.

Considering that the Amended JVA is null and void ab initio, there is no necessity to rule on this last issue. Besides, the Court is not a trier of facts, and this last issue involves a determination of factual matters.

WHEREFORE, the petition is GRANTED. The Public Estates Authority and Amari Coastal Bay Development Corporation are PERMANENTLY ENJOINED from implementing the Amended Joint Venture Agreement which is hereby declared NULL and VOID ab initio.

SO ORDERED.

G.R. No. L-630            November 15, 1947

ALEXANDER A. KRIVENKO, petitioner-appellant, vs.THE REGISTER OF DEEDS, CITY OF MANILA, respondent and appellee.

Gibbs, Gibbs, Chuidian and Quasha of petitioner-appellant.First Assistant Solicitor General Reyes and Solicitor Carreon for respondent-appellee.Marcelino Lontok appeared as amicus curies.

MORAN, C.J.:

Alenxander A. Kriventor alien, bought a residential lot from the Magdalena Estate, Inc., in December of 1941, the registration of which was interrupted by the war. In May, 1945, he sought to accomplish said registration but was denied by the register of deeds of Manila on the ground that, being an alien, he cannot acquire land in this jurisdiction. Krivenko then brought the case to the fourth branch of the Court of First Instance of Manila by means of aconsulta, and that court rendered judgment sustaining the refusal of the register of deeds, from which Krivenko appealed to this Court.

There is no dispute as to these facts. The real point in issue is whether or not an alien under our Constitution may acquire residential land.

It is said that the decision of the case on the merits is unnecessary, there being a motion to withdraw the appeal which should have been granted outright, and reference is made to the ruling laid down by this Court in another case to the effect that a court should not pass upon a constitutional question if its judgment may be made to rest upon other grounds. There is, we believe, a confusion of ideas in this reasoning. It cannot be denied that the constitutional question is unavoidable if we choose to decide this case upon the merits. Our judgment cannot to be made to rest upon other grounds if we have to render any judgment at all. And we cannot avoid our judgment simply because we have to avoid a constitutional question. We cannot, for instance, grant the motion withdrawing the appeal only because we wish to evade the constitutional; issue. Whether the motion should be, or should not be, granted, is a question involving different considerations now to be stated.

According to Rule 52, section 4, of the Rules of Court, it is discretionary upon this Court to grant a withdrawal of appeal after the briefs have been presented. At the time the motion for withdrawal was filed in this case, not only had the briefs been prensented, but the case had already been voted and the majority decision was being prepared. The motion for withdrawal stated no reason whatsoever, and the Solicitor General was agreeable to it. While the motion was pending in this Court, came the new circular of the Department of Justice, instructing all register of deeds to accept for registration all transfers of residential lots to aliens. The herein respondent-appellee was naturally one of the registers of deeds to obey the new circular, as against his own stand in this case which had been maintained by the trial court and firmly defended in this Court by the Solicitor General. If we grant the withdrawal, the the result would be that petitioner-appellant Alexander A. Krivenko wins his case, not by a decision of this Court, but by the decision or circular of the Department of Justice, issued while this case was pending before this Court. Whether or not this is the reason why appellant seeks the withdrawal of his appeal and why the Solicitor General readily agrees to that withdrawal, is now immaterial. What is material and indeed very important, is whether or not we should allow interference with the regular and complete exercise by this Court of its constitutional functions, and whether or not after having held long deliberations and after having reached a clear and positive conviction as to what the constitutional mandate is, we may still allow our conviction to be silenced, and the constitutional mandate to be ignored or misconceived, with all the harmful consequences that might be brought upon the national patromony. For it is but natural that the new circular be taken full advantage of by many, with the circumstance that perhaps the constitutional question may never come up again before this court, because both vendors and vendees will have no interest but to uphold the validity of their transactions, and very unlikely will the register of deeds venture to disobey the orders of their superior. Thus, the possibility for this court to voice its conviction in a future case may be remote, with the result that our indifference of today might signify a permanent offense to the Constitution.

All thse circumstances were thoroughly considered and weighted by this Court for a number of days and the legal result of the last vote was a denial of the motion withdrawing the appeal. We are thus confronted, at this stage of the proceedings, with our duty, the constitutional question becomes unavoidable. We shall then proceed to decide that question.

Article XIII, section 1, of the Constitutional is as follows:

Article XIII. — Conservation and utilization of natural resources.

SECTION 1. All agricultural, timber, and mineral lands of the public domain, water, minerals, coal, petroleum, and other mineral oils, all forces of potential energy, and other natural resources of the Philippines belong to the State, and their disposition, exploitation, development, or utilization shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per centum of the capital of which is owned by such citizens, subject to any existing right, grant, lease, or concession at the time of the inaguration of the Government established uunder this Constitution. Natural resources, with the exception of public agricultural land, shall not be alienated, and no licence, concession, or lease for the exploitation, development, or utilization of any of the natural resources shall be granted for a period exceeding twenty-five years, renewable for another twenty-five years, except as to water rights for irrigation, water supply, fisheries, or industrial uses other than the development of water "power" in which cases beneficial use may be the measure and the limit of the grant.

The scope of this constitutional provision, according to its heading and its language, embraces all lands of any kind of the public domain, its purpose being to establish a permanent and fundamental policy for the conservation and utilization of all natural resources of the Nation. When, therefore, this provision, with reference to lands of the public domain, makes mention of only agricultural, timber and mineral lands, it means that all lands of the public domain are classified into said three groups, namely, agricultural, timber and mineral. And this classification finds corroboration in the circumstance that at the time of the adoption of the Constitution, that was the basic classification existing in the public laws and judicial decisions in the Philippines, and the term "public agricultural lands" under said classification had then acquired a technical meaning that was well-known to the members of the Constitutional Convention who were mostly members of the legal profession.

As early as 1908, in the case of Mapa vs. Insular Government (10 Phil., 175, 182), this Court said that the phrase "agricultural public lands" as defined in the Act of Congress of July 1, 1902, which phrase is also to be found in several sections of the Public Land Act (No. 926), means "those public lands acquired from Spain which are neither mineral for timber lands." This definition has been followed in long line of decisions of this Court. (See Montano vs. Insular Government, 12 Phil., 593; Ibañez de Aldecoa vs. Insular Government, 13 Phil., 159; Ramos vs.Director of Lands, 39 Phil., 175; Jocson vs. Director of Forestry, 39 Phil., 560; Ankron vs.Government of the Philippines, 40 Phil., 10.) And with respect to residential lands, it has been held that since they are neither mineral nor timber lands, of necessity they must be classified as agricultural. In Ibañez de Aldecoa vs. Insular Government (13 Phil., 159, 163), this Court said:

Hence, any parcel of land or building lot is susceptible of cultivation, and may be converted into a field, and planted with all kinds of vegetation; for this reason, where land is not mining or forestal in its nature, it must necessarily be included within the classification of agricultural land, not because it is actually used for the purposes of agriculture, but because it was originally agricultural and may again become so under other circumstances; besides, the Act of Congress contains only three classification, and makes no special provision with respect to building lots or urban lands that have ceased to be agricultural land.

In other words, the Court ruled that in determining whether a parcel of land is agricultural, the test is not only whether it is actually agricultural, but also its susceptibility to cultivation for agricultural purposes. But whatever the test might be, the fact remains that at the time the Constitution was adopted, lands of the public domain were classified in our laws and jurisprudence into agricultural, mineral, and timber, and that the term "public agricultural lands" was construed as referring to those lands that were not timber or mineral, and as including residential lands. It may safely be presumed, therefore, that what the members of the Constitutional Convention had in mind when they drafted the Constitution was this well-known classification and its technical meaning then prevailing.

Certain expressions which appear in Constitutions, . . . are obviously technical; and where such words have been in use prior to the adoption of a Constitution, it is presumed that its framers and the people who ratified it have used such expressions in accordance with their technical meaning. (11 Am. Jur., sec. 66, p. 683.)  Also Calder vs.Bull, 3 Dall. [U.S.], 386; 1 Law. ed., 648; Bronson vs. Syverson, 88 Wash., 264; 152 P., 1039.)

It is a fundamental rule that, in construing constitutions, terms employed therein shall be given the meaning which had been put upon them, and which they possessed, at the time of the framing and adoption of the instrument. If a word has acquired a fixed, technical meaning in legal and constitutional history, it will be presumed to have been employed in that sense in a written Constitution. (McKinney vs. Barker, 180 Ky., 526; 203 S.W., 303; L.R.A., 1918 E, 581.)

Where words have been long used in a technical sense and have been judicially construed to have a certain meaning, and have been adopted by the legislature as having a certain meaning prior to a particular statute in which they are used, the rule of construction requires that the words used in such statute should be construed according to the sense in which they have been so previously used, although the sense may vary from strict literal meaning of the words. (II Sutherland, Statutory Construction, p. 758.)

Therefore, the phrase "public agricultural lands" appearing in section 1 of Article XIII of the Constitution must be construed as including residential lands, and this is in conformity with a legislative interpretation given after the adoption of the Constitution. Well known is the rule that "where the Legislature has revised a statute after a Constitution has been adopted, such a revision is to be regarded as a legislative construction that the statute so revised conforms to the Constitution." (59 C.J., 1102.) Soon after the Constitution was adopted, the National Assembly revised the Public Land Law and passed Commonwealth Act No. 141, and sections 58, 59 and 60 thereof permit the sale of residential lots to Filipino citizens or to associations or corporations controlled by such citizens, which is equivalent to a solemn declaration that residential lots are considered as agricultural lands, for, under the Constitution, only agricultural lands may be alienated.

It is true that in section 9 of said Commonwealth Act No. 141, "alienable or disposable public lands" which are the same "public agriculture lands" under the Constitution, are classified into agricultural, residential, commercial, industrial and for other puposes. This simply means that the term "public agricultural lands" has both a broad and a particular meaning. Under its broad or general meaning, as used in the Constitution, it embraces all lands that are neither timber nor mineral. This broad meaning is particularized in section 9 of Commonwealth Act No. 141 which classifies "public agricultural lands" for purposes of alienation or disposition, into lands that are stricly agricultural or actually devoted to cultivation for agricultural puposes; lands that are residential; commercial; industrial; or lands for other purposes. The fact that these lands are made alienable or disposable under Commonwealth Act No. 141, in favor of Filipino citizens, is a conclusive indication of their character as public agricultural lands under said statute and under the Constitution.

It must be observed, in this connection that prior to the Constitution, under section 24 of Public Land Act No. 2874, aliens could acquire public agricultural lands used for industrial or residential puposes, but after the Constitution and under section 23 of Commonwealth Act No. 141, the right of aliens to acquire such kind of lands is completely stricken out, undoubtedly in pursuance of the constitutional limitation. And, again, prior to the Constitution, under section 57 of Public Land Act No. 2874, land of the public domain suitable for residence or industrial purposes could be sold or leased to aliens, but after the Constitution and under section 60 of Commonwealth Act No. 141, such land may only be leased, but not sold, to aliens, and the lease granted shall only be valid while the land is used for the purposes referred to. The exclusion of sale in the new Act is undoubtedly in pursuance of the constitutional limitation, and this again is another legislative construction that the term "public agricultural land" includes land for residence purposes.

Such legislative interpretation is also in harmony with the interpretation given by the Executive Department of the Government. Way back in 1939, Secretary of Justice Jose Abad Santos, in answer to a query as to "whether or not the phrase 'public agricultural lands' in section 1 of Article XII (now XIII) of the Constitution may be interpreted to include residential, commercial, and industrial lands for purposes of their disposition," rendered the following short, sharp and crystal-clear opinion:

Section 1, Article XII (now XIII) of the Constitution classifies lands of the public domain in the Philippines into agricultural, timber and mineral. This is the basic classification adopted since the enactment of the Act of Congress of July 1, 1902, known as the Philippine Bill. At the time of the adoption of the Constitution of the Philippines, the term 'agricultural public lands' and, therefore, acquired a technical meaning in our public laws. The Supreme Court of the Philippines in the leading case of Mapa vs. Insular Government, 10 Phil., 175, held that the phrase 'agricultural public lands' means those public lands acquired from Spain which are neither timber nor mineral lands. This definition has been followed by our Supreme Court in many subsequent case. . . .

Residential commercial, or industrial lots forming part of the public domain must have to be included in one or more of these classes. Clearly, they are neither timber nor mineral, of necessity, therefore, they must be classified as agricultural.

Viewed from another angle, it has been held that in determining whether lands are agricultural or not, the character of the land is the test (Odell vs. Durant, 62 N.W., 524; Lorch vs. Missoula Brick and Tile Co., 123 p.25). In other words, it is the susceptibility of the land to cultivation for agricultural purposes by ordinary farming methods which determines whether it is agricultural or not (State vs. Stewart, 190 p. 129).

Furthermore, as said by the Director of Lands, no reason is seen why a piece of land, which may be sold to a person if he is to devote it to agricultural, cannot be sold to him if he intends to use it as a site for his home.

This opinion is important not alone because it comes from a Secratary of Justice who later became the Chief Justice of this Court, but also because it was rendered by a member of the cabinet of the late President Quezon who actively participated in the drafting of the constitutional provision under consideration. (2 Aruego, Framing of the Philippine Constitution, p. 598.) And the opinion of the Quezon administration was reiterated by the Secretary of Justice under the Osmeña administration, and it was firmly maintained in this Court by the Solicitor General of both administrations.

It is thus clear that the three great departments of the Government — judicial, legislative and executive — have always maintained that lands of the public domain are classified into agricultural, mineral and timber, and that agricultural lands include residential lots.

Under section 1 of Article XIII of the Constitution, "natural resources, with the exception of public agricultural land, shall not be aliented," and with respect to public agricultural lands, their alienation is limited to Filipino citizens. But this constitutional purpose conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens. It is partly to prevent this result that section 5 is included in Article XIII, and it reads as follows:

Sec. 5. Save in cases of hereditary succession, no private agricultural land will be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

This constitutional provision closes the only remaining avenue through which agricultural resources may leak into aliens' hands. It would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens. Undoubtedly, as above indicated, section 5 is intended to insure the policy of nationalization contained in section 1. Both sections must, therefore, be read together for they have the same purpose and the same subject matter. It must be noticed that the persons against whom the prohibition is directed in section 5 are the very same persons who under section 1 are disqualified "to acquire or hold lands of the public domain in the Philippines." And the subject matter of both sections is the same, namely, the non-transferability of "agricultural land" to aliens. Since "agricultural land" under section 1 includes residential lots, the same technical meaning should be attached to "agricultural land under section 5. It is a rule of statutory construction that "a word or phrase repeated in a statute will bear the same meaning throughout the statute, unless a different intention appears." (II Sutherland, Statutory Construction, p. 758.) The only difference between "agricultural land" under section 5, is that the former is public and the latter private. But such difference refers to ownership and not to the class of land. The lands are the same in both sections, and, for the conservation of the national patrimony, what is important is the nature or class of the property regardless of whether it is owned by the State or by its citizens.

Reference is made to an opinion rendered on September 19, 1941, by the Hon. Teofilo Sison, then Secretary of Justice, to the effect that residential lands of the public domain may be considered as agricultural lands, whereas residential lands of private ownership cannot be so considered. No reason whatsoever is given in the opinion for such a distinction, and no valid reason can be adduced for such a discriminatory view, particularly having in mind that the purpose of the constitutional provision is the conservation of the national patrimony, and private residential lands are as much an integral part of the national patrimony as the residential lands of the public domain. Specially is this so where, as indicated above, the prohibition as to the alienable of public residential lots would become superflous if the same prohibition is not equally applied to private residential lots. Indeed, the prohibition as to private residential lands will eventually become more important, for time will come when, in view of the constant disposition of public lands in favor of private individuals, almost all, if not all, the residential lands of the public domain shall have become private residential lands.

It is maintained that in the first draft of section 5, the words "no land of private ownership" were used and later changed into "no agricultural land of private ownership," and lastly into "no private agricultural land" and from these changes it is argued that the word "agricultural" introduced in the second and final drafts was intended to limit the meaning of the word "land" to land actually used for agricultural purposes. The implication is not accurate. The wording of the first draft was amended for no other purpose than to clarify concepts and avoid uncertainties. The words "no land" of the first draft, unqualified by the word "agricultural," may be mistaken to include timber and mineral lands, and since under section 1, this kind of lands can never be private, the prohibition to transfer the same would be superfluous. Upon the other hand, section 5 had to be drafted in harmony with section 1 to which it is supplementary, as above indicated. Inasmuch as under section 1, timber and mineral lands can never be private, and the only lands that may become private are agricultural lands, the words "no land of private ownership" of the first draft can have no other meaning than "private agricultural land." And thus the change in the final draft is merely one of words in order to make its subject matter more specific with a view to avoiding the possible confusion of ideas that could have arisen from the first draft.

If the term "private agricultural lands" is to be construed as not including residential lots or lands not strictly agricultural, the result would be that "aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions, and whole towns and cities," and that "they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf courses, playgrounds, airfields, and a host of other uses and purposes that are not, in appellant's words, strictly agricultural." (Solicitor General's Brief, p. 6.) That this is obnoxious to the conservative spirit of the Constitution is beyond question.

One of the fundamental principles underlying the provision of Article XIII of the Constitution and which was embodied in the report of the Committee on Nationalization and Preservation of Lands and other Natural Resources of the Constitutional Convention, is "that lands, minerals, forests, and other natural resources constitute the exclusive heritage of the Filipino nation. They should, therefore, be preserved for those under the sovereign authority of that nation and for their posterity." (2 Aruego, Framing of the Filipino Constitution, p. 595.) Delegate Ledesma, Chairman of the Committee on Agricultural Development of the Constitutional Convention, in a speech delivered in connection with the national policy on agricultural lands, said: "The exclusion of aliens from the privilege of acquiring public agricultural lands and of owning real estate is a necessary part of the Public Land Laws of the Philippines to keep pace with the idea of preserving the Philippines for the Filipinos." (Emphasis ours.) And, of the same tenor was the speech of Delegate Montilla who said:  "With the complete nationalization of our lands and natural resources it is to be understood that our God-given birthright should be one hundred per cent in Filipino hands . . .. Lands and natural resources are immovables and as such can be compared to the vital organs of a person's body, the lack of possession of which may cause instant death or the shortening of life. If we do not completely antionalize these two of our most important belongings, I am afraid that the time will come when we shall be sorry for the time we were born. Our independence will be just a mockery, for what kind of independence are we going to have if a part of our country is not in our hands but in those of foreigners?" (Emphasis ours.) Professor Aruego says that since the opening days of the Constitutional Convention one of its fixed and dominating objectives was the conservation and nationalization of the natural resources of the country. (2 Aruego, Framing of the Philippine Constitution, p 592.) This is ratified by the members of the Constitutional Convention who are now members of this Court, namely, Mr. Justice Perfecto, Mr. Justice Briones, and Mr. Justice Hontiveros. And, indeed, if under Article XIV, section 8, of the Constitution, an alien

may not even operate a small jitney for hire, it is certainly not hard to understand that neither is he allowed to own a pieace of land.

This constitutional intent is made more patent and is strongly implemented by an act of the National Assembly passed soon after the Constitution was approved. We are referring again to Commonwealth Act No. 141. Prior to the Constitution, there were in the Public Land Act No. 2874 sections 120 and 121 which granted aliens the right to acquire private only by way of reciprocity. Said section reads as follows:

SEC. 120. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienated, or transferred, except to persons, corporations, associations, or partnerships who may acquire lands of the public domain under this Act; to corporations organized in the Philippine Islands authorized therefor by their charters, and, upon express authorization by the Philippine Legislature, to citizens of countries the laws of which grant to citizens of the Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land, or permanent improvements thereon, or any interest therein, as to their own citizens, only in the manner and to the extent specified in such laws, and while the same are in force but not thereafter.

SEC. 121. No land originally acquired in any manner under the provisions of the former Public Land Act or of any other Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippine Islands with regard to public lands,terrenos baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations, or associations who may acquire land of the public domain under this Act; to corporate bodies organized in the Philippine Islands whose charters may authorize them to do so, and, upon express authorization by the Philippine Legislature, to citizens of the countries the laws of which grant to citizens of the Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land or pemanent improvements thereon or any interest therein, as to their own citizens, and only in the manner and to the extent specified in such laws, and while the same are in force, but not thereafter: Provided, however, That this prohibition shall not be applicable to the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by competent courts, nor to lands and improvements acquired or held for industrial or residence purposes, while used for such purposes:Provided, further, That in the event of the ownership of the lands and improvements mentioned in this section and in the last preceding section being transferred by judicial decree to persons,corporations or associations not legally capacitated to acquire the same under the provisions of this Act, such persons, corporations, or associations shall be obliged to alienate said lands or improvements to others so capacitated within the precise period of five years, under the penalty of such property reverting to the Government in the contrary case." (Public Land Act, No. 2874.)

It is to be observed that the pharase "no land" used in these section refers to all private lands, whether strictly agricultural, residential or otherwise, there being practically no private land which had not been acquired by any of the means provided in said two sections. Therefore, the prohibition contained in these two provisions was, in effect, that no private land could be transferred to aliens except "upon express authorization by the Philippine Legislature, to citizens of Philippine Islands the same right to acquire, hold, lease, encumber, dispose of, or alienate land." In other words, aliens were granted the right to acquire private land merely by way of reciprocity. Then came the Constitution and Commonwealth Act No. 141 was passed, sections 122 and 123 of which read as follows:

SEC. 122. No land originally acquired in any manner under the provisions of this Act, nor any permanent improvement on such land, shall be encumbered, alienated, or transferred, except to persons, corporations, associations, or partnerships who may acquire lands of the public domain under this Act or to corporations organized in the Philippines authorized thereof by their charters.

SEC. 123. No land originally acquired in any manner under the provisions of any previous Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippines with regard to public

lands terrenos baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain, or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations or associations who may acquire land of the public domain under this Act or to corporate bodies organized in the Philippines whose charters authorize them to do so: Provided, however,That this prohibition shall not be applicable to the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by competent courts: Provided, further, That in the event of the ownership of the lands and improvements mentioned in this section and in the last preceding section being transferred by judicial decree to persons, corporations or associations not legally capacitated to acquire the same under the provisions of this Act, such persons, corporations, or associations shall be obliged to alienate said lands or improvements to others so capacitated within the precise period of five years; otherwise, such property shall revert to the Government.

These two sections are almost literally the same as sections 120 and 121 of Act No. 2874, the only difference being that in the new provisions, the right to reciprocity granted to aliens is completely stricken out. This, undoubtedly, is to conform to the absolute policy contained in section 5 of Article XIII of the Constitution which, in prohibiting the alienation of private agricultural lands to aliens, grants them no right of reciprocity. This legislative construction carries exceptional weight, for prominent members of the National Assembly who approved the new Act had been members of the Constitutional Convention.

It is said that the lot question does not come within the purview of sections 122 and 123 of Commonwealth Act No. 141, there being no proof that the same had been acquired by one of the means provided in said provisions. We are not, however, diciding the instant case under the provisions of the Public Land Act, which have to refer to land that had been formerly of the public domain, otherwise their constitutionality may be doubtful. We are deciding the instant case under section 5 of Article XIII of the Constitution which is more comprehensive and more absolute in the sense that it prohibits the transfer to alien of any private agricultural land including residential land whatever its origin might have been.

And, finally, on June 14, 1947, the Congress approved Republic Act No. 133 which allows mortgage of "private real property" of any kind in favor of aliens but with a qualification consisting of expressly prohibiting aliens to bid or take part in any sale of such real property as a consequence of the mortgage. This prohibition makes no distinction between private lands that are strictly agricultural and private lands that are residental or commercial. The prohibition embraces the sale of private lands of any kind in favor of aliens, which is again a clear implementation and a legislative interpretation of the constitutional prohibition. Had the Congress been of opinion that private residential lands may be sold to aliens under the Constitution, no legislative measure would have been found necessary to authorize mortgage which would have been deemed also permissible under the Constitution. But clearly it was the opinion of the Congress that such sale is forbidden by the Constitution and it was such opinion that prompted the legislative measure intended to clarify that mortgage is not within the constitutional prohibition.

It is well to note at this juncture that in the present case we have no choice. We are construing the Constitution as it is and not as we may desire it to be. Perhaps the effect of our construction is to preclude aliens, admitted freely into the Philippines from owning sites where they may build their homes. But if this is the solemn mandate of the Constitution, we will not attempt to compromise it even in the name of amity or equity. We are satisfied, however, that aliens are not completely excluded by the Constitution from the use of lands for residential purposes. Since their residence in the Philippines is temporary, they may be granted temporary rights such as a lease contract which is not forbidden by the Constitution. Should they desire to remain here forever and share our fortunes and misfortunes, Filipino citizenship is not impossible to acquire.

For all the foregoing, we hold that under the Constitution aliens may not acquire private or public agricultural lands, including residential lands, and, accordingly, judgment is affirmed, without costs.

Feria, Pablo, Perfecto, Hilado, and Briones, JJ., concur.

Separate Opinion

PERFECTO, J., concurring:

Today, which is the day set for the promulgation of this Court's decision might be remembered by future generations always with joy, with gratitude, with pride. The failure of the highest tribunal of the land to do its duty in this case would have amounted to a national disaster. We would have refused to share the responsibility of causing it by, wittingly or unwittingly, allowing ourselves to act as tools in a conspiracy to sabotage the most important safeguard of the age-long patrimony of our people, the land which destiny of Providence has set aside to be the permanent abode of our race for unending generations. We who have children and grandchildren, and who expect to leave long and ramifying dendriform lines of descendants, could not bear the thought of the curse they may fling at us should the day arrive when our people will be foreigners in their fatherland, because in the crucial moment of our history , when the vision of judicial statemanship demanded on us the resolution and boldness to affirm and withhold the letter and spirit of the Constitution, we faltered. We would have prefered heroic defeat to inglorious desertion. Rather than abandon the sacred folds of the banner of our convictions for truth, for justice, for racial survival. We are happy to record that this Supreme Court turned an impending failure to a glorious success, saving our people from a looming catastrophe.

On July 3, 1946, the case of Oh Cho vs. Director of Lands, (43 Off. Gaz., 866), was submitted for our decision. The case was initiated in the Court of First Instance of Tayabas on January 17, 1940, when an alien, Oh Cho, a citizen of China, applied for title and registration of a parcel of land located in the residential district of Guinayangan, Tayabas, with a house thereon. The Director of Lands opposed the application, one of the main grounds being that "the applicant, being a Chinese, is not qualified to acquire public or private agricultural lands under the provisions of the Constitution."

On August 15, 1940, Judge P. Magsalin rendered decision granting the application. The Director of Lands appealed. In the brief filed by Solicitor General Roman Ozaeta, afterwards Associate Justice of the Supreme Court and now Secretary of Justice, and Assistant Solicitor General Rafael Amparo, appellant made only two assignments of error, although both raised but one question, the legal one stated in the first assignment of error as follows:

The lower court erred in declaring the registration of the land in question in favor of the applicant who, according to his own voluntary admission is a citizen of the Chinese Republic.

The brief was accompanied, as Appendix A, by the opinion of Secretary of Justice Jose A. Santos — who, while Chief Justice of the Supreme Court, suffered heroic martyrdom at the hands of the Japanese — addressed to the Secretary of Agriculture and Commerce on July 15, 1939, supporting the same theory as the one advanced by the Director of Lands. The same legal question raised by appellant is discussed, not only in the brief for the appellee, but also in the briefs of the several amici curiae allowed by the Supreme Court to appear in the case.

As a matter of fact, the case has been submitted for final decision of the Supreme Court since July of 1941, that is, six years ago. It remained undecided when the Pacific War broke out in December, 1941. After the Supreme Court was recognized in the middle of 1945, it was found that the case was among those which were destroyed in February, 1945, during the battle for the liberation of Manila. The case had to be reconstituted upon motion of the office of the Solicitor General, filed with this Court on January 14, 1946, in which it was also prayed that, after being reconstituted, the case be submitted for final adjudication. The case was for the second time submitted for decision on July 3, 1946.

After the last submission, it took the Supreme Court many days to deliberate on the case, especially on the legal question as to whether an alien may, under the Constitution, acquire private urban lands. An overwhelming majority answered no. But when the decision was promulgated on August 31, 1946, a majority resolved to ignore the question, notwithstanding our efforts to have the question, which is vital, pressing and far-reaching, decided once and for all, to dispel definitely the uncertainty gnawing the conscience of the people. It has been out lot to be alone in expressing in unmistakable terms our opinion and decision on the main legal question raised by the appellant. The constitutional question was by-passed by the majority because they were of opinion that it was not necessary to be decided, notwithstanding the fact that it was the main and only legal question upon which appellant Director of Lands relied in his appeal, and the question has been almost exhaustively argued in four printed briefs filed by the parties and the amici curiae. Assurance was, nevertheless, given that

in the next case in which the same constitutional question is raised, the majority shall make known their stand on the question.

The next case came when the present one submitted to us for decision on February 3, 1947. Again, we deliberated on the constitutional question for several days.

On February 24, 1947, the case was submitted for final vote, and the result was that the constitutional question was decided against petitioner. The majority was also overwhelming. There were eight of us, more than two-thirds of the Supreme Court. Only three Justices dissented.

While the decision was being drafted, somehow, the way the majority had voted must have leaked out. On July 10, 1947, appellant Krivenko filed a motion for withdrawal of his appeal, for the evident purpose of preventing the rendering of the majority decision, which would settle once and for all the all-important constitutional question as to whether aliens may acquire urban lots in the Philippines.

Appellant chose to keep silent as to his reason for filing the motion. The Solicitor General's office gave its conformity to the withdrawal of the appeal. This surprising assent was given without expressing any ground at all. Would the Supreme Court permit itself to be cheated of its decision voted since February 24, 1947?

Discussion immediately ensued as to whether the motion should be granted or denied, that is, whether this Court should abstain from promulgating the decision in accordance with the result of the vote taken on February 24, 1947, as if, after more than six years during which the question has been submitted for the decision of the highest tribunal of the land, the same has failed to form a definite opinion.

After a two-day deliberation, the Chief Justice, Mr. Justice Paras, Mr. Justice Hontiveros, Mr. Justice Padilla and and Mr. Justice Tuason voted to grant the motion for withdrawal. Those who voted to deny the motion were Mr. Justice Feria, Mr. Justice Pablo, ourselves, Mr. Justice Hilado and Mr. Justice Bengzon. The vote thus resulted in a tie, 5-5. The deadlock resulting from the tie should have the effect of denying the motion, as provided by section 2 of Rule 56 to the effect that "where the Court in banc is equally divided in opinion . . . on all incidental matters, the petition or motion shall be denied." And we proposed that the rule be complied with, and the denial be promulgated.

Notwithstanding this, as Mr. Justice Briones was then absent, our brethren resolved to give him the opportunity of casting his vote on the question, although we insisted that it was unnecessary. Days later, when all the members of the Court were already present, a new vote was taken. Mr. Justice Briones voted for the denial of the motion, and his vote would have resulted, as must be expected, in 6 votes for the denial against 5 for granting. But the final result was different. Seven votes were cast for granting the motion and only four were cast for its denial.

But then, by providential design or simply by a happy stroke of luck or fate, on the occasion of the registration by the register of deeds of Manila of land purchases of two aliens, a heated public polemic flared up in one section of the press, followed by controversial speeches, broadcast by radio, and culminating in the issuance on August 12, 1947, of Circular No. 128 of the Secretary of Justice which reads as follows:

TO ALL REGISTER OF DEEDS:

Paragraph 5 of Circular No. 14, dated August 25, 1945, is hereby amended so as to read as follows:

5"(a). Instruments by which private real property is mortgaged in favor of any individual, corporation, or association for a period not exceeding five years, renewable for another five years, may be accepted for registration. (Section 1, Republic Act No. 138.)

"(b). Deeds or documents by which private residential, commercial, industrial or other classes of urban lands, or any right, title or interest therein is transferred, assigned or encumbered to an alien, who is not an enemy national, may be registered. Such classes of land are not deemed included within the purview of the prohibition contained in section 5, Article XIII of the Constitution against the acquisition or holding of "private agricultural land" by those who are not qualified to hold or acquire lands of the public domain. This is in conformity with Opinion No. 284,

series of 1941, of the Secretary of Justice and with the practice consistently followed for nearly ten years since the Constitution took effect on November 15, 1935.

"(c). During the effectivity of the Executive Agreement entered into between the Republic of the Philippines and the Government of the United States on July 4, 1946, in pursuance of the so-called Parity Amendment to the Constitution, citizens of the United States and corporations or associations owned or controlled by such citizens are deemed to have the same rights as citizens of the Philippines and corporations or associations owned or controlled by such are deemed to have the same rights as citizens of the Philippines and corporations or associations owned or controlled by citizens of the Philippines in the acquisition of all classes of lands in the Philippines, whether of private ownership or pertaining to the public domain."

ROMAN OZAETASecretary of Justice

Paragraph 5 of Circular No. 14 dated August 25, 1945, amended by the above is as follows:

Deeds or other documents by which a real property, or a right, or title thereto, or an interest therein, is transferred, assigned or encumbered to an alien, who is not enemy national, may be entered in the primary entry book; but, the registration of said deeds or other documents shall be denied — unless and/or until otherwise specifically directed by a final decision or order of a competent court — and the party in interest shall be advised of such denial, so that he could avail himself of the right to appeal therefrom, under the provisions of section 200 of the Revised Administrative Code. The denial of registration of shall be predicated upon the prohibition contained in section 5, Article XIII (formerly Article XII) of the Constitution of the Philippines, and sections 122 and 123 of Commonwealth Act No. 141, the former as amended by the Commonwealth Act No. 615.

The polemic found echo even in the Olympic serenity of a cloistered Supreme Court and the final result of long and tense deliberation which ensued is concisely recorded in the following resolution adopted on August 29, 1947:

In Krivenko vs. Register of Deeds, City of Manila, L-630, a case already submitted for decision, the appellant filed a motion to withdraw his appeal with the conformity of the adverse party. After full discussion of the matter specially in relation to the Court's discretion (Rule 52, section 4, and Rule 58), Mr. Justice Paras, Mr. Justice Hilado, Mr. Justice Bengzon, Mr. Justice Padilla and Mr. Justice Tuazon voted to grant, while the Chief Justice, Mr. Justice Feria, Mr,. Justice Pablo, Mr. Justice Perfecto and Mr. Justice Briones voted to deny it. A redeliberation was consequently had, with the same result. Thereupon Mr. Justice Paras proposed that Mr. Justice Hontiveros be asked to sit and break the tie; but in view of the latter's absence due to illness and petition for retirement, the Court by a vote of seven to three did not approve the proposition. Therefore, under Rule 56, section 2, the motion to withdraw is considered denied.

Mr. Justice Padilla states that in his opinion the tie could not have the effect of overruling the previous vote of seven against four in favor of the motion to withdraw.

Mr. Justice Paras states: Justice Hontiveros is aware of and conversant with the controversy. He has voted once on the motion to withdraw the appeal. He is still a member of the Court and, on a moment's notice, can be present at any session of the Court. Last month, when all the members were present, the votes on the motion stood 7 to 4. Now, in the absence of one member, on reconsideration, another changed his vote resulting in a tie. Section 2 of Rule 56 requires that all efforts be exerted to break a deadlock in the votes. I deplore the inability of the majority to agree to my proposition that Mr. Justice Hontiveros be asked to participate in the resolution of the motion for withdrawal. I hold it to be fundamental and necessary that the votes of all the members be taken in cases like this.

Mr. Justice Perfecto stated, for purposes of completeness of the narration of facts, that when the petition to withdraw the appeal was submitted for resolution of this Court two days after this petition was filed, five justices voted to grant and five others voted to deny, and expressed the opinion that since then, according to the rules, the

petition should have been considered denied. Said first vote took place many days before the one alluded to by Mr. Justice Padilla.

Mr. Justice Tuason states: The motion to withdraw the appeal was first voted upon with the result that 5 were granting and 5 for denial. Mr. Justice Briones was absent and it was decided to wait for him. Some time later, the same subject was deliberated upon and a new voting was had, on which occasion all the 11 justices were present. The voting stood 7 for allowing the dismissal of the appeal and 4 against. Mr. Justice Perfecto and Mr. Justice Briones expressed the intention to put in writing their dissents. Before these dissents were filed, about one month afterwards, without any previous notice the matter was brought up again and re-voted upon; the result was 5 to 5. Mr. Justice Hontiveros, who was ill but might have been able to attend if advised of the necessity of his presence, was absent. As the voting thus stood, Mr. Justice Hontiveros' vote would have changed its result unless he changed his mind, a fact of which no one is aware. My opinion is that since there was no formal motion for reconsideration nor a previous notice that this matter would be taken up once more, and since Mr. Justice Hontiveros had every reason to believe that the matter was over as far as he was concerned, this Justice's vote in the penultimate voting should, if he was not to be given an opportunity to recast his vote, be counted in favor of the vote for the allowance of the motion to withdraw. Above all, that opportunity should not have been denied on grounds of pure technicality never invoked before. I counted that the proceeding was arbitrary and illegal.

The resolution does not recite all the reasons why Mr. Justice Hontiveros did not participate in that last two votings and why it became unnecessary to wait for him any further to attend the sessions of the Court and to cast his vote on the question.

Appellant Krivenko moved for the reconsideration of the denial of his withdrawal of appeal, alleging that it became moot in view of the ruling made by the Secretary of Justice in circular No. 128, thus giving us a hint that the latter, wittingly or unwittingly, had the effect of trying to take away from the Supreme Court the decision of an important constitutional question, submitted to us in a pending litigation. We denied the motion for reconsideration. We did not want to entertain any obstruction to the promulgation of our decision.

If the processes had in this case had been given the publicity suggested by us for all the official actuations of this Supreme Court, it should have been known by the whole world that since July, 1946, that is, more than a year ago, the opinion of the members of this Court had already been crystallized to the effect that under the Constitution, aliens are forbidded from acquiring urban lands in the Philippines, and it must have known that in this case a great majority had voted in that sense on February 24, 1947.

The constitutional question involved in this case cannot be left undecided without jeopardizing public interest. The uncertainty in the public mind should be dispelled without further delay. While the doubt among the people as to what is the correct answer to the question remains to be dissipated, there will be uneasiness, undermining public morale and leading to evils of unpredictable extent. This Supreme Tribunal, by overwhelming majority, already knows what the correct answer is, and should not withhold and keep it for itself with the same zealousness with which the ancient families of the Eumolpides and Keryces were keeping the Eleusinian mysteries. The oracle of Delphus must speak so that the people may know for their guidance what destiny has in store for them.

The great question as to whether the land bequeathed to us by our forefathers should remain as one of the most cherished treasures of our people and transmitted by inheritance to unending generations of our race, is not a new one. The long chain of land-grabbing invasions, conquests, depredations, and colonial imperialism recorded in the darkest and bloodiest pages of history from the bellicose enterprises of the Hittites in the plains of old Assyria, irrigated by the waters of the Tigris and Euphrates, and the invasion of Egypt by the Hyksos, up to the conquests of Hernan Cortes and Pizarro, the achievements of Cecil Rhodes, and the formation of the Spanish, Portuguese, Dutch, French and German colonial empires, had many of its iron links forged in our soil since Magellan, the greatest navigator of all history, had set foot at Limasawa and paid, for his daring enterprises, with his life at the hands of Lapulapu's men in the battle of Mactan.

Since then, almost four centuries ago, our people have continuously been engaged in an unrelentless struggle to defend the national patrimony against the aggressive onslaughts of foreigners bent on grabbing our lands. First came the

Spanish encomenderos and other gratuitous concessioners who were granted by the Spanish crown immense areas of land. Immediately came the friars and other religious corporations who, notwithstanding their sacred vow of poverty, felt their greed whetted by the bountiful opportunities for easy and unscrupulous enrichment. Taking advantage of the uncontrollable religious leadership, on one side, and of the Christian virtues of obedience, resignation, humility, and credulity of a people who, after conversion to Catholicism, embraced with tacit faith all its tenets and practiced them with the loyalty and fidelity of persons still immune from the disappointments and bitterness caused by the vices of modern civilization, the foreign religious orders set aside all compunction to acquire by foul means many large estates. Through the practice of confession and other means of moral intimidation, mostly based on the eternal tortures of hell, they were able to obtain by donation or by will the lands of many simple and credulous Catholics who, in order to conquer the eternal bliss of heaven, renounced all their property in favor of religious orders and priests, many under the guise of chaplaincies or other apparently religious purposes, leaving in destitute their decendants and relatives. Thus big religious landed estates were formed, and under the system unbearable iniquities were committed. The case of the family of Rizal is just an index of the situation, which, under the moral leadership of the hero, finally drove our people into a national revolution not only against the Spanish sovereignty under which the social cancer had grown to unlimited proportions.

Profiting from the lessons of history, the Delegates to our Constitutional Convention felt it their duty to insert in the fundamental law effective guarantees for conserving the national patrimony, the wisdom of which cannot be disputed in a world divided into nations and nationalities. In the same way that scientists and technicians resorted to radar, sonars, thermistors and other long range detection devices to stave off far-away enemy attacks in war, said Delegates set the guarantees to ward off open inroads or devious incursions into the national patrimony as a means of insuring racial safety and survival.

When the ideal of one world should have been translated into reality, those guarantees might not be needed and our people may eliminate them. But in the meantime, it is our inescapable devoir, as the ultimate guardians of the Constitution, never to neglect the enforcement of its provisions whenever our action is called upon in a case, like the one now before us.

One of the fundamental purposes of the government established by our Constitution is, in its very words, that it "shall conserve and develop the patrimony of the nation." That mandate is addressed to all departments and branches of our government, without excluding this Supreme Court. To make more specific the mandate, Article XIII has been inserted so as to avoid all doubt that all the natural resources of the country are reserved to Filipino citizens. Our land is the most important of our natural resources. That land should be kept in the hands of our people until, by constitutional amendment, they should decide to renounce that age-long patrimony. Save by hereditary succession — the only exception allowed by the Constitution — no foreigner may by any means acquire any land, any kind of land, in the Philippines. That was the overwhelming sentiment prevailing in the Constitutional Convention, that was the overpowering desire of the great majority of the Delegates, that was the dominating thought that was intended to be expressed in the great document, that was what the Committee on Style — the drafter of the final text — has written in the Constitution, and that was what was solemnly ratified in the plebiscite by our people, who then were rankling by the sore spot of illegally Japanized Davao.

The urgency of settling once and forever the constitutional question raised in this case cannot be overemphasized. If we should decide this question after many urban lots have been transferred to and registered in the name of alien purchasers, a situation may be created in which it will be hard to nullify the transfers and the nullification may create complications and problems highly distasteful to solve. The Georgia case is an objective lesson upon which we can mirror ourselves. From pages 22 and 23 of the book of Charless P. Curtiss, Jr. entitled "Lions Under the Throne," we quote the following:

It is of interest that it seems to have happened chiefly in important cases. Fletcher  vs.Peck, in 1810, is the stock example. That was the first case in which the Court held a state statute void. It involved a national scandal. The 1795 legislature of Georgia sold its western lands, most of Alabama and Mississippi, to speculators. Perhaps it was the greatest real estate steal in our history. The purchase price was only half a million dollars. The next legislature repealed the statute for fraud, the bribery of legislator, but not before the land companies had completed the deal and unloaded. By that time, and increasingly soon afterwards, more and more people had bought, and their title was

in issue. Eleven million of the acres had been bought for eleven cents an acre by leading citizens of Boston. How could they clear their title? Alexander Hamilton gave an opinion, that the repeal of the grant was void under the Constitution as an impairment of the obligation of a contract.

But could they not get a decision from the Supreme Court? Robert Fletcher of Anhirst, New Hampshire, had bought fifteen thousand acres from John Peck of Boston. He sued Peck, and he won. Fletcher appealed. Plainly it was a friendly suit. Marshall was nobody's fool. He told Cranch that the Court was reluctant to decide the case "as it appeared manifestly made up for the purpose of getting the Court's judgment." John Quincy Adams so reports in his diary. Yet Marshall decided it, and he held the repeal void, just as Hamilton said it was. "The fact that Marshall rendered an opinion, under the circumstances," says Beveridge, "is one of the finest proofs of his greatness. A weaker man than John Marshall, and one less wise and courageous, would have dismissed the appeal." That may be, but it was the act of a stateman, not of a judge. The Court has always been able to overcome its judicial diffidence on state occasions.

We see from the above how millions of acres of land were stolen from the people of Georgia and due to legal technicalities the people were unable to recover the stolen property. But in the case of Georgia, the lands had fallen into American hands and although the scandal was of gigantic proportions, no national disaster ensued. In our case if our lands should fall into foreign hands, although there may not be any scandal at all, the catastrophe sought to be avoided by the Delegates to our Constitutional Convention will surely be in no remote offing.

We conclude that, under the provisions of the Constitution, aliens are not allowed to acquire the ownership of urban or residential lands in the Philippines and, as consequence, all acquisitions made in contravention of the prohibitions since the fundamental law became effective are null and void per se and ab initio. As all public officials have sworn, and are duty bound, to obey and defend the Constitution, all those who, by their functions, are in charge of enforcing the prohibition as laid down and interpreted in the decision in this case, should spare no efforts so that any and all violations which may have taken place should be corrected.

We decide, therefore, that, upon the above premises, appellant Alexander A. Krivenko, not being a Filipino citizen, could not acquire by purchase the urban or residential lot here in question, the sale made in his favor by the Magdalena Estate, Inc. being null and void ab initio, and that the lower court acted correctly in rendering the appealed decision, which we affirm.

HILADO, J., concurring:

Upon appellant's motion to withdraw his appeal herein with the conformity of the Solicitor General in behalf of appellee, indulging, at that time, all possible intendments in favor of another department, I ultimately voted to grant the motion after the matter was finally deliberated and voted upon. But the votes of the ten Justices participating were evenly divided, and under Rule 52, section 4, in relation, with Rule 56, section 2, the motion was denied. The resolution to deny was adopted in the exercise of the court's discretion under Rule 52, section 4, by virtue of which it has discretion to deny the withdrawal of the appeal even though both appellant and appellee agree upon the withdrawal, when appellee's brief has been filed. Under the principle that where the necessary number have concurred in an opinion or resolution, the decision or determination rendered is the decision or determination of the court (2 C.J.S., 296), the resolution denying the motion to withdraw the appeal was the resolution of the court. Pursuant to Rule 56, section 2, where the court  in banc is equally divided in opinion, such a motion "shall be denied." As a necessary consequence, the court as to decide the case upon the merits.

After all, a consistent advocate and defender of the principle of separation of powers in a government like ours that I have always been, I think that under the circumstances it is well for all concerned that the Court should go ahead and decide the constitutional question presented. The very doctrine that the three coordinate, co-equal and independent departments should be maintained supreme in their respective legitimate spheres, makes it at once the right and duty of each to defend and uphold its own peculiar powers and authority. Public respect for and confidence in each department must be striven for and kept, for any lowering of the respect and diminution of that confidence will in the same measure take away from the very usefulness of the respective department to the people. For this reason, I believe that we should avert and avoid any tendency in this direction with respect to this Court.

I am one of those who presume that Circular No. 128, dated August 12, 1947, of the Secretary of Justice, was issued in good faith. But at the same time, that declaration in sub-paragraph (b) of paragraph 5 of Circular No. 14, which was already amended, to the effect that private residential, commercial, industrial or other classes of urban lands "are not deemed included within the purview of the prohibition contained in section 5, Article XIII, of the Constitution", made at a time when the self-same question was pending decision of this Court, gives rise to the serious danger that should this Court refrain from deciding said question and giving its own interpretation of the constitutional mandate, the people may see in such an attitude an abandonment by this Court of a bounden duty, peculiarly its own, to decide a question of such a momentous transcedence, in view of an opinion, given in advance of its own decision, by an officer of another department. This will naturally detract in no small degree from public respect and confidence towards the highest Court of land. Of course, none of us — the other governmental departments included — would desire such a situation to ensue.

I have distinctively noticed that the decision of the majority is confined to the constitutional question here presented, namely, "whether or not an alien under our Constitution may acquire residential land." (Opinion, p. 2) Leases of residential lands, or acquisition, ownership or lease of a house or building thereon, for example, are not covered by the decision.

With these preliminary remarks and the statement of my concurrence in the opinion ably written by the Chief Justice, I have signed said decision.

BRIONES, M., conforme:

Estoy conforme en un todo con la ponencia, a la cual no e puede añadir ni quitar nada, tal es su acabada y compacta elaboracion. Escribo, sin embargo, esta opinion separada nada mas que para unas observaciones, particularmente sobre ciertas fases extraordinarias de este asunto harto singular y extraordinario.

I. Conforme se relata en la concurrencia del Magistrado Sr. Perfecto, despues de laboriosas deliberaciones este asunto se puso finalmente a votacion el 24 de Febrero de este año, confirmandose la sentencia apelada por una buena mayoria. En algunos comentarios adelantados por cierta parte de la prensa — impaciencia que solo puede hallar explicacion en un nervioso y excesivo celo en la vigilancia de los intereses publicos, maxime tratandose, como se trata, de la conservacion del patrimonio nacional se ha hecho la pregunta de por que se ha demorado la promulgacion de la sentencia, habiendose votado� el asunto todavia desde case comienzos del año.

A simple vista, la pregunta tiene justificacion; pero bien considerados los hechos se vera que no ha habido demora en el presente caso, mucho menos una demora desusada, alarmante, que autorice y justifique una critica contra los metodos de trabajo de esta corte. El curso seguido por el asunto ha sido normal, bajo las circunstancias. En realidad, no yan en esta Corte ahora, sino aun en el pasado, antes de la guerra, hubo mas lentitud en casos no tan dificiles ni tan complicados como el que nos ocupa, en que las cuestiones planteadas y discutidas no tenian la densidad constitucional y juridica de las que se discuten en el presente caso. Hay que tener en cuenta que desde el 24 de Febrero en que se voto finalmente el asunto hasta el 1.0 de Abril en que comenzaron las vacaciones judiciales, no habian transcurrido mas que 34 dias; y cuando se reanudaron formalmente las sesiones de esta Corte en Julio se suscito un incidente de lo mas extraordinario — incidente que practicamente vino a impedir, a paralizar la pronta promulgacion de la sentencia. Me refiero a la mocion que el 10 de Julio persentaron los abogados del apelante pidiendo permiso para retirar su apelacion. Lo sorpredente de esta mocion es que viene redactada escuetamente, sin explicar el por que de la retirada, ni expresar ningun fundamento. Pero lo mas sorpredente todavia es la conformidad dada por el Procurador General, tambien escueta e inceremoniosamente.

Digo que es sorprendente la retirada de la apelacion porque pocos casos he visto que hayan sido arguidos con tanta energiaa, tanto interes y tanto celo por la parte apelante como este que nos ocupa. Los abogados del apelante no solo presentaron un alegato concienzudo de 34 paginas, sino que cuando se llamo a vista el asunto informaron verbalmente ante esta Corte argumentando vigorosa y extensamente sobre el caso. El Procurador General, por su parte, ha presentado un alegato igualmente denso, de 31 paginas, en que se discuten acabadamente, hasta el punto maximo de saturacion y agotamiento, todos los angulos de la formidable cuestion constitutional objeto de este asunto. Tambien informo el Procurador General verbalmente ante esta Corte, entablando fuerte lid con los abogados del apelante.

Con la mocion de retirada de la apelacion se hubo de retardar necesariamente la promulgacion de la sentencia, pues trabajosas deliberaciones fueron necesarias para resolver la cuestion, dividiendose casi por igual los miembros de la Corte sobre si debia o no permitirse la retirada. Habia unanimidad en que bajo la regla 52, seccion 4, del Reglamento de los Tribunales teniamos absoluta discrecion para conceder o denegar la mocion, toda vez que los alegatos estaban sometidos desde hacia tiempo, el asunto estaba votado y no faltaba mas que la firma y promulgacion de la decision juntamente con las disidencias. Sin embargo, algunos Magistrados opinaban que la discrecion debia ejercitarse en favor de la retirada en virtud de la practica de evitar la aplicacion de la Constitucion a la solucion de un litigio siempre que se puede sentenciarlo de otra manera. (Entre los Magistrados que pensaban de esta manera se incluian algunos que en el fundo del asunto estaban a favor de la confirmacion de la sentencia apelada, es decir, creian que la Constitucion prohibe a los extranjeros la adquisicion a titulo dominical de todo genero de propiedad inmueble, sin excluir los solares residenciales, comerciales e industriales.) Pero otros Magistrados opinaban que en el estado tan avanzado en que se hallaba el asunto los dictados del interes publico y de la sana discrecion requerian imperiosamente que la cuestion se atacase y decidiese frontalmente; que si una mayoria de esta Corte estaba convencida, como al parecer lo estaba, de que existia esa interdiccion constitucional contra la facultad adquisitiva de los extranjeros, nuestro claro deber era apresurarnos a dar pleno y positivo cumplimiento a la Constitucion al presentarse la primera oportunidad; que el meollo del asunto, la lis mota era eso — la interdiccion constitucional — ; por tanto, no habia otra manera de decidirlo mas que aplicando la Constitucion; obrar de otra manera seria desercion, abandono de un deber jurado.

Asi estaban las deliberaciones cuando ocurre otro incidente mucho mas extraordinario y sorprendente todavia que la retirada no explicada de la apelacion con la insolita conformidad del Procurador General; algo asi como si de un cielo sereno, sin nubes, cayera de pronto un bolido en medio de nosotros, en medio de la Corte: me refiero a la circular num. 128 del Secretario de Justicia expedida el 12 de Agosto proximo pasado, esto es, 32 dias despues de presentada la mocion de retirada de la apelacion. Esa circular se cita comprensivamente en la ponencia y su texto se copia integramente en la concurrencia del Magistrado Sr. Perfecto; asi que me creo excusado de transcibirla in toto. En breves terminos, la circular reforma el parrafo 5 de la circular num. 14 del mismo Departamento de Justicia de fecha 25 de Agosto, 1945, y levanta la prohibicion o interdiccion sobre el registro e inscripcion en el registro de la propiedad de las "escrituras o documentos en virtud de los cuales terrenos privados residencias, comerciales, industriales u otras clases de terrenos urbanos, o cualquier derecho, titulo o interes en ellos, se transfieren, ceden o gravan a un extranjero que no es nacional enemigo." En otras palabras, el Secretario de Justicia, por medio de esta circular dejaba sin efecto la prohibicion contenida en lacircular num. 14 del mismo Departamento — la prohibicion que precisamente ataca el apelante Krivenko en el asunto que tenemos ante Nos — y authorizaba y ordenaba a todoslos Registradores de Titulos en Filipinas para que inscribiesen las escrituras o documentos de venta, hipoteca o cualquier otro gravamen a favor de extranjeros, siempre que no se tratase de terrenos publicos o de "terrenos privados agricolas," es decir, siempre que los terrenos objeto de la escritura fuesen "residenciales, comerciales e industriales."

La comparacion de esa circular con un bolido caido subitamenteen medio de la Corte no es un simple tropo, no esuna mera imagen retorica; refleja una verdadera realidad.Esa circular, al derogar la prohibicion decretada en elparrafo 5 de la circular num. 14 — prohibicion que, comoqueda dicho, es precisamente el objeto del presente asunto — venia practicamente a escamotear la cuestion discutida, lacuestion sub judice sustrayendola de la jurisdiccion de lostribunales. Dicho crudamente, el Departamento de Justiciavenia a arrebatar el asunto de nuestras manos, delas manos de esta Corte, anticipandose a resolverlo por simismo y dando efectividad y vigor inmediatos a su resolucionmediante la correspondiente autorizacion a los Registradoresde Titulos.

A la luz de esa circular queda perfectamente explicadala mocion de retirada de la apelacion consentida insolitamentepor el Procurador General. ¿ Para que esperar ladecision de la Corte Suprema que acaso podria ser adversa? ¿ No estaba ya esa circular bajo la cual podian registrarseahora la ventas de terrenos residenciales, comerciales oindustriales a extranjeros? Por eso no es extraño quelos abogados del apelante Krivenko, en su mocion de 1.0 de Septiembre, 1947, pidiendo la reconsideracion de nuestroauto denegando la retirada de la apelacion, dijeran porprimera vez como fundamento que la cuestion ya era simplemente academica ("question is now moot") en vista deesa circular y de la conformidad del Procurador Generalcon la retirada de la apelacion. He aqui las propias palabras de la mocion del apelante Krivenko:

In view of Circular No. 128 of the Department of Justice, dated August 12, 1947, which amends Circular No. 14 by expressly authorizing the registration of the sale of urban lands to aliens, and in view of the fact that the Solicitor General has joined in the motion for withdrawal of the appeal, there is no longer a controversy between the parties and the question is now moot. For this reason the court no longer has jurisdiction to act on the case.1

Lo menos que se puede decir de esa accion del Departamentode Justicia atravesandose en el camino de los tribunalesmientras un asunto esta sub judice, es que ello no tieneprecedentes, que yo sepa, en los anales de la administracionde justicia en Filipinas en cerca de medio siglo que llevamosde existencia bajo un gobierno constitucional y sustancialmente republicano. Ni aun en los llamados dias del Imperio, cuando la soberania americana era mas propensa a manejar el baston grueso y afirmar vigorosamente losfueros de su poder y autoridad, se vio jamas a un departamento de Justicia o a alguna de sus dependencias entrometerseen el ejercicio ordenado por los tribunales de sujurisdiccion y competencia. Era una tradicion firmamenteestablecida en las esfersas del Poder Ejecutivo — tradicioninviolada e inviolable — maxime en el Departamento de Justicia y en la Fiscalia General, el inhibirse de expresar algunaopinion sobre un asunto ya sometido a los tribunales, excepto cuando venian llamados a hacerlo, en representaciondel gobierno, en los tramites de un litigio, civil o criminal,propiamente planteado ante dichos tribunales. Fuera deestos casos, la inhibicion era tradicionalmente absoluta,observada con la devocion y la escrupulosidad de un rito.Y la razon era muy sencilla: hamas se queria estorbar nientorpecer la funcion de los tribunales de justicia, loscuales, bajo la carta organica y las leyes, tenian absolutoderecho a actuar con maximo desembarazo, libres de todaingerencia extraña. Esto se hizo bajo la Ley Cooper; estose hizo bajo la Ley Jones; y esto se hizo bajo la Ley Tydings-McDuffie, la ley organica del Commonwealth. Creo que el pueblo filipino tiene derecho a que eso mismo se haga bajo el gobierno de la Republica, que es suyo, que es de su propia hechura. ¡ No faltaba mas que los hombres de su propia raza le nieguen lo que no le negaron gobernantesde otra raza!

No se niega la facultad de supervision que tiene el Departamento de Justicia sobre las oficinas y dependenciasque caen bajo su jurisdiccion, entre ellas las varias oficinasde registro de la propiedad en Manila y en las provincias.Tampoco se niega la facultad que tiene dicho Departamentopara expedir circulares, ya de caracter puramente administrativo,ya de caracter semijudicial, dando instrucciones,vgr., a los registradores acerca de como deben desempenarsus funciones. De hecho la circular num. 14 de 25 deAgosto, 1945, es de esta ultima naturaleza: en ella seinstruye y ordena a los registradores de titulos que noregistren ni inscriban ventas de propiedad inmueble aextranjeros, asi sean terrenos residenciales, comerciales oindustriales. Pero la facultad llega solo hasta alli; fuerade esas fronteras el campo ya es pura y exclusivamentejudicial. Cuando una determinada circular del Departamentoa los registradores es combatida o puesta en telade juicio ante los tribunales, ora por fundamentosconstitucionales, ora por razones meramente legales, ya no esel Departamento el que tiene que determinar o resolverla disputa, sino que eso compete en absoluto a los tribunalesde justicia. Asi lo dispone terminantemente el articulo200 del Codigo Administrativo. Segun este articulo, elasunto o disputa debe elevarse en forma de consulta a la Sala Cuarta del Juzgado de Primera Instancia de Manila.La ley no confiere ninguna facultad al Departamento deJusticia para enjuiciar y decidir el caso. Y cuando unaparte no estuviere conforme con la decision de la SalaCuarta, ella puede alzarse de la sentencia para ante laCorte Suprema. He aqui el texto integro del articulo 200 del Codigo Administrativo:

SEC. 200. Reference of doubtful matter to judge of fourth branch of Court of First Instance at Manila. — When the register of deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage, or other instrument presented for registration or where any party in interest does not agree with the register of deeds with reference to any such matter, the question shall be referred to the judge of the fourth branch of the Court of First Instance of the Ninth Judicial District either on the certificate of the register of deeds stating the question upon which he is in doubt or upon the suggestion in writing of the party in interest; and thereupon said judge, upon consideration of the matter as shown by the record certified to him, and in case of registered lands, after notice to the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to be made.

Tal es lo que ha ocurrido en el presente caso. Krivenkopresento su escritura de compraventa al Registrador de laPropiedad de Manila. Este denego la inscripcion solicitadaen virtud de la prohibicion contenida en la circular num.14. ¿ Que hizo Krivenko entonces? Elevo acaso el asuntoal Departamento de Justicia? No. Lo que hicieron susabogados entonces fue

presentar una demanda el 23 de Noviembre, 1945, contra el Registrador de Titulos ante laSala Cuarta del Juzgado de Primera Instancia de Manila,numerandose dicha demanda como consulta num. 1289; ycuando esta Sala decidio el asunto confirmando la acciondel Registrador, Krivenko trajo a esta Corte la apelacionque estamos considerando. Tan elemental es esto que enla misma circular num. 14 se dice que la prohibicion quedadecretada hasta que los tribunales resuelvan lo contrario. He aqui la fraseologia pertinente de dicha circularnum. 14:

. . . the registration of said deeds or other documents shall be denied, — unless and /or until otherwise specifically directed by a final decision or order of a competent court — and the party in interest shall be advised of such denial, so that he could avail himself of the right to appeal therefrom, under the provisions of section 200 of the Revised Administrative Code.

La posicion de la Corte Suprema ante este caso claro ypositivo de intromision ( interference) en sus funciones esde lo mas peculiar. Tenemos en el Reglamento de losTribunales algunas disposiciones que proveen sancion pordesacato para ciertos actos de intromision en el ejercicio de lasfunciones judiciales.2 Pero se preguntara naturalmente;son aplicables estas disposiciones cuando la intromisionprocede de un ramo del poder ejecutivo, el cual, como sesabe, en la mecanica de los poderes del Estado, es — usandoun anglicismo-coigual y coordinado con el poder judicial,maxime si esa intromision se ha realizado so capa de unacto oficial? Cualquiera, pues, puede imaginarse la situaciontremendamente embarazosa, inclusive angustiosa enque esta Corte ha quedado colocada con motivo de esa intromision departamental, exponiendose a chocar con otropoder del Estado. En casos recientes en que estaban envueltos otros poderes, esta Corte, estimando dudosa suposicion constitucional, prefirio adoptar una actitud deelegante inhibicion, de "manos fuera" (hands-off), si bienhay que hacer constar que con la fuerte disidencia dealgunos Magistrados, entre ellos el opinante.3Tenemos, portanto, un caso de verdadera intromision en que siendo, porlo menos, dudosa la facultad de esta Corte para imponeruna sancion por desacato de acuerdo con el Reglamento delos Tribunales, le queda el unico recurso decente, ordenado:registrar su excepcion sin ambages ni eufemismos contrala intromision, y reafirmar con todo vigor, con toda firmezasu independencia.

Se arguye con tenaz persitencia que debiamos de haberconcedido la mocion de retirada de la apelacion, por dosrazones: (a) porque el Procurador General estaba conformecon dicha retirada; (b) para evitar la resolucion delpunto constitucional envuelto, en virtud de la practica,segun se dice, de soslayar toda cuestion constitucionalsiempre que se pueda. Respecto de la primera razon serasuficiente decir que el Procurador General es libre de entraren cualquiera transaccion sobre un asunto en que interviene,pero es evidente que su accion no ata no obliga aesta Corte en el ejercicio de la discrecion que le confierela regla, 52, seccion 4, del Reglamento de los Tribunales,que reza como sigue:

Rule 52, SEC. 4 — An appeal may be withdrawn as of right at any time before the filing of appelle's brief.  After that brief is filed the withdrawal may be allowed by the court in its discretion. . . . (Las cursivas son nuestras.)

Como se ve, nuestra discrecion es absoluta:no estacondicionada por la conformidad o disconformidad de una delas partes. Y la incondicionalidad de esa discrecion es masabsoluta e imperativa alli donde el litigio versa sobre unamateria queno afecta solo a un interes privado, sino quees de interes publico, como el caso presente en que el Procurador General ha transigido no sobre un asunto suyopersonal o de un cliente particular, sino de un cliente demucha mayor monta y significacion — el pueblo filipino — ysiendo materia del litigio la propiedad del suelo, parte, vitalisima del patrimonio nacional que nuestro pueblo hacolocado bajo la salvaguardia de la Constitucion.

Respecto del segundo fundamento, o se que debiamospermitir la retirada dela apelacion para no tener queresolver la cuestion constitucional disputada, bastara decirque la practica, prinsipio o doctrina que se invoca, llevaconsigo una salvedad o cualificacion y es que el litigio se pueda resolver de otra mañera. ¿ Podemos soslayar elpunto constitucional discutido en el pleito que nos ocupa? ¿ Podemos decidirlo bajo otra ratio decidendi, esto es, queno sea la constitucionalidad o inconstitucionalidad de laventa del inmueble al apelante Krivenko, en virtud desucondicion de extranjero? Indudablemente que no: la lis mota, la unica, es la misma constitucionalidad de la compraventa de que se trata. Para decidir si al recurrido apelado, Registrador de Titulos de la Ciudad de Manila,le asiste o no razon para denegar la inscripcion solicitada por el recurrente y apelante, Krivenko, la unica disposicionlegal que se puede aplicar es el articulo XIII, seccion 5, dela Constitucion de Filipinas, invocado por el Registrador como defensa e inserto en el parrafo 5 de la circular num.14 como

fundamento de la prohibicion o interdiccion contrael registro de las ventas de terreno a extranjeros. Nohay otra ley para el caso.

El caso de Oh Cho contra el Director de Terrenos43 Gac. Of., No. 3 pag. 866), que se cita en unade las disidencias, es completamente diferente. Es verdadque alli se planteo tambien la cuestion constitucional de quese trata, por cierto que el que lo planteaba en nombre delGobierno era el actual Secretario de Justicia que entoncesera Procurador General, y lo pleantaba en un sentido absolumente concorde con la circular num. 14. Pero esta Corte, con la disidencia de algunos Magistrados, opto porsoslayar el punot constitucional denegando el registro solicitadopor Oh Cho, por fundamento de que bajo la LeyNo. 2874 sobre terrenos de dominio publico los extranjerosestan excluidos de dichos terrenos; es decir, que el terrenosolicitado se considero como terreno publico. ¿ Podemos hacer la misma evasion en el presente caso, acogiendonosa la ley No. 2874 o a cualquier otra ley? Indudablemente que no porque ningun Magistrado de esta Corte, muchomenos los disidentes, consideran el terreno reclamado por Krivenko como terreno publico. Luego todos los caminosestan bloqueados para nosotros, menos el camino constitucional.Luego el segundo fundamento alegado paracubrir la evasiva tambien debe descartarse totalmente.

Se insinua que no debiamos darnos prisa en resolver constitucionalmente el presente asunto, puesto que puedenpresentarse otros de igual naturaleza en tiempo no remoto,y en efecto se cita el caso de Rellosa contra Gaw Chee Hun(49 Off. Gaz., 4345), en que los alegatos de ambas partesya estan sometidos y se halla ahora pendiente de decision.Es evidente que esto tampoco arguye en favor de la evasiva,en primer lugar, porque cuando se le somete el deber de iraveriguando en su Escribania si hay casos de igual naturaleza, sino que los casos se someten por orden de prelaciony prioridad de tiempo a medida que esten preparados paracaso debe decidirse por sus propios meritos y conforme ala ley pertinente. La salvedad o cualificacion de la doctrinao practica que se invoca no dice: "hay qoe soslayar la cuestionconstitucional siempre que se pueda resolver de otra manera, reservando dicha cuestion constitucional para otro caso; la salvedad es dentro del mismo caso. De otro modono seria un simple soslayo legal, sino que seria unsub terfugio impropio, indebido, ilegal. En el presente caso no ha habido ninguna prisa, excesivo celo, como se insinua;desde luego no mayor prisa que en otros asuntos. Elcurso, el ritmo de los tramites ha sido normal; en realidad,si ha habido algo, ha sido un poco de parsimonia, lentitud.

¿ Habia justificacion para demorar el pronto, rapido pronunciamento de nuestro veredicto sobre la formidablecuestion constitucional debatida, por lo menos, tan pronto como fuese posible? ¿ Habia alguna razon de interespublico para justificar una evasiva? Absolutamenteninguna. Por el contrario, nuestro deber ineludible, imperioso,era formular y promulgar inmediatamente ese veredicto. Lo debiamos a nuestras conciencias; lo debiamos, sobretodo, al pais para la tranquilidad y conveniencia de todos — del pueblo filipino y de los extranjeros residentes o quetuvieren voluntad de residir o negociar en estas Islas. Asicada cual podria hacer su composicion de lugar, podriaorientarse sin zozobras ni miedo a la incertidumbre. Tantonacionales como extranjeros sabrian donde invertir sudinero. Todo lo que necesitabamos era tener dentro de esta Corte una provee la interdiccion de que se trata. Tuvimosesa mayoria cunado se voto por primera vez este asuntoen Febrero de este año (8 contra 3); la tuvimos cuandodespues de laboriosas deliberaciones quedo denegada lamocion de retirada de la mayoria haya cambiado de opinionsobre el fondo de la cuestion; la tenemos ahora naturalmente.Por tanto, nada hace falta ya para que se de lasenal de "luz verde" a la promulgacion de la sentencia.Toda evasiva seira neglignecia, desidia. Es mas: seriaabandono de un deber jurado, como digo en otra parte deesta concurrencia; y la Corte Suprema naturalmente npha de permitir que se la pueda proferir el cargo de queha abandonado su puesto privilegiado de vigia, de centinela avanzado de la Constitucion.

No es que la Corte Suprema, con esto, pretenda tener"un monopolio de la virtud de sostener y poner en vigor,o de suplir una deficiencia en la Constitucion," o que segobierno, como se insinua en una de las disidencias. Nohay tal cosa. El principio de la supremacia judicial no esuna pretension ni mucho menos un ademan de inmodestiao arrogancia, sino que es una parte vital de nuestrasinstutuciones, una condicion peculiarisima de nuestro sistema de gobierno en que la judicatura, como uno de lostres poderes del Estado, corresponde la facultad exclusivade disponer de los asuntos judiciales. Con respecto a losasuntos de registro particularmente esa facultad exclusivano solo se infiere del principio de la supremacia judicial, sino que, como ya se ha dicho en otra parte de esta concurrencia,se halla especificamente estutuida en el articulo 200del Codigo Administrativo transcrito arriba. Este articuloconfiere jurisdiccion exclusiva a los tribunales de justiciapara decidir las

cuestiones sobre registro, y esto lo ha reconocido el mismo Departamento de Justicia en su circularnum. 14 al referir tales cuestiones a la determinacion oarbitrio judicial en casos de duda o litigio.

Es injustificada la insinuacion de que, al parecer, la mayoria denego la retirada de la apelacion no tanto para resolver el asunto en su fondo o por sus meritos, como paraenrvar los efectos de la circular num. !28 del Departamentode Justicia, pues Krivenko, el apelante, habriaganado entonces su pleito no en virtud de una sentenciajudicial, sino pasando por lapuerta trasera abierta por esacircular. Tampoco hay tal cosa. Ya repetidas veces seha dicho que el presente asunto se habia votado muchoantes de que se expidiese esa circular. Lo que mascorrectamente podria decirse es que antes de la expedicion deesa desafortunada circular poderosas razones de interespublico aconsejaban que se denegase la retirada de la apelacion y se diese fin al asunto mediante una sentencia enel fondo, despues de la expidicion esas razones quedaroncentuplicadas. La explicacion es sencilla: nuestra aquiescenciaa la reirada hubiera podico interpretarse entoncescomo que nuestra jurisdiccion. Es mas: hubiera podidointerpretarse como una abyecta rendicion en la pugna porsostener los fueros de cada ramo coigual y coordinado del gobierno.

Es todavia mas injustificada la insinuacion de que ladenegacion de la retirada de la apelacion equivale "a asumir queel solicitante-apelante y el Procurador General sehan confabulado con el Departamento de Justicia no solopara ingerirse en las funciones de esta Corte, sino paraenajenar el patrimonio nacional a los extranjeros." Estoes inconcebible. La corte presume que todos han obradode buena fe, de acuerdo con los dictados de su conciencia.Se ha denegado la retirada de la apelacion por razonespuramente juridicas y objectivas, sin consideracion a losmotivos de nadie.

Por ultimo, estimo que debe rectificarse la asercion de queel Magistrado Hontiveros fue excluido de la votacion queculmino en un emmpate y que determino el rechazamientode la retirada de la apelacion, a tenor de la regla 56, seccion2, Reglamento de los Tribunales. El Magistrado Hontiverosno estaba presente en la sesion por estar enfermo;pero estaban presentes 10 Magistrados, es decir, mas queel numero necesario para formar quorum y para despacharlos asuntos. La rueda de la justicia en la Corte Supremajamas ha dejado de rodar por la ausencia de uno o dosmiembros, siempre que hubiese  quorum. A la votacionprecedieron muy laboriosas y vivas deliberaciones. Ningun Magistrado Ilamo la atencion de la Corte hacia la ausencia del Sr. Hontiveros. Ningun Magistrado pidio que se leesperase o llamase al Sr. Hontiveros. Todos se conformaroncon que se efectuase la votacion, no obstante la ausencia del Sr. Hontiveros. En efecto, se hace la votaciony resulta un empate, es decir, 5 contra 5. De acuerdo conla regla 56, quedaba naturalmente denegrada la mocion deretirada. ¿Donde esta, pues, la "ilegalidad", donde la"arbitrariedad"?

Algunos dias despues se presento una mocion de reconsideracion,la misma en que ya se alegaba como ndamentoel hecho de que la cuestion era simplemente academica (moot question) por la conformidad del Procurador Generalcon la retirada y por la circular num. !28 del Departamento de Justicia. Tampoco estaba presente el Sr. Hontiverosal someterse la mocion, la cual fue de nuevo denegada.Pregunto otra vez: ¿donde esta la "arbitrariedad"? Queculpa tenia la Corte de que el Sr. Hontiveros no pudieraestar presente por estar enfermo? ¿Iba a detenerse larueda de la justicia por eso? Conviene, sin embargo, hacerconstar que sobre el fondo de la cuestion el Sr. Hontiverosera uno de los 8 que habian votado en favor de la confirmacion de la sentencia apelada, es decir, en favor delveredicto de que la Contitucion excluye a los extrajerosde la propiedad de bienes raices en Filipinas.

II. No queda casi nada decir sobre el fondo de lacuestion. Todos los angulos y fases de la misma estanacabadamente tratados y discutidos en la ponencia. Melimitare, por tanto, a hacer unas cuantas observaciones,unas sobre hermeneutica legal, y otra sobre historia nacionalcontemporanea, aprovachando en este ultimo respectomis reminiscencias y mi experiencia como humilde miembroque fui de la Asamblea Constituyente que redacto y arobola Constitucion de Filipinas.

Toda la cuestion, a mi juicio, se reduce a determinar einterpretar la palabra "agricola" (agricultural) usada enel articulo XIII, seccion 5, de la Constitucion. He aqui eltexto completo de la seccion:

SEC. 5. — Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

¿Incluye la palabra "agricultural" aqui empleada los terrenosresidenciales, comerciales e industriales? Tal es lacuestion: la mayoria de esta Corte que si; los disidentesdicen que no.

Es indudable que por razones sanas de hermenuetica legalel articulo XIII de que se trata debe interpretarse como untodo homogeneo, simetrico. En otras palabras, los cocablosalli empleados deben interpretarse en el sentido de quetienen un mismo significado. Es absurdo pensar o suponerque en el texto de una ley, sobre todo dentro del estrechomarco de un articulo, un vocablo tenga dos o mas significadosdistintos, a menos que la misma ley asi to diga expresamente. Lapresuncion es que el legislador sigue y seatiene a las reglas literarias elementales.

Ahora bien: el articulo XIII consta de dos partes — laprimera, que trata de los terrenos agricolas de dominiopublico, y la segunda, que se a los terrenos agricolaprivados o partuculares.

La primera parte se compone de las secciones 1 y 2que vinculanla propiedad de los terrenos publicos enel Estado y disponen que solo se pueden enajenar a favorde ciudadanos filipinos, o de corporaciones o asociacionesen que el 60 por ciento del cacital, por lo menos, pertenecea tales ciudadanos. En secciones se emplea literalmentela frase "public agricultural land."

La segunda parte la componen las secciones 3 y 5: laseccion 3 perceptua que "the Congress may determine bylaw the size of private agricultural land which individuals,coporations, or associations may acquire and hold, subjectto rights existing prior to the enactment of such law"4 ;y la seccion 5 es la que queda transcrita mas arriba y esobjeto del presente litigio. En ambas secciones se emplealiteralmente la frase "private agricultural land."

No hay ninguna cuestion de que la frase "public agriculturalland" empleada en la primera parte comprende terrenosresidenciales, comerciales e industriales; lo admitenlos mismos abogados del apelante y los Sres. Magistradosdisidentes. Y ¿por que lo admiten? Sera porque en laConstitucion se define la palabra "agricultural" aplicadaa terrenos publicos, en el sentido de incluir solaresresidenciales, comerciales e industriales? Indudablementeque no, porque en ninguna parte de la Constitucion se datal definicion. Lo admiten porque en esta jurisdicciontenemos una serie consistente de sentencias de esta CorteSuprema en que es jurisprudencia firmamente establecidala doctrina de que la palabra "agricultural" usada en laLey del Congreso de los Estados Unidos de 1902 (LeyCooper) y en nuestras leyes de terrenos publicos comprendey abarca solares residenciales, comerciales, industriales yqualquier otra clase de terrenos, excepto forestales yminerales.5 Es decir, que se aplica a la actual Constitucion deFilipinas una interpretacion clasica, tradicional, embebidaen nuestra jurisprudencia de cerca de medio siglo.

Ahora bien, pregunto: si la palabra "agricultural" empleadaen la primera parte del articulo XIII tiene talsignificado — y lo tiene porque la Constitucion no da otrodiferente — ¿por que esa misma palabra empleada en lasegunda parte, unas cuantas lineas mas adelante, no hade tener el mismo significado? ¿Da acaso la Constitucionuna definicion de la palabra "agricultural" cuandose refiere a terreno privado? ¿Donde esta esa definicion? ¿O es que se pretende que la diferenciacion opera no envirtud de la palabra "agricultural", sino en virtud delvocablo "public" o "private", segun que se trate de terrenopublico o privado?

Si la intencion de la Asemblea Constituyente fuera eldar a la palabra "agricultural" aplicada a terreno privadoun significado distinto de cuando se refiere a terreno publico, lo hubiese hecho constar asi expresamente en elmismo texto de la Constitucion Si, como se admite, laAsemblea opto por no definir la palabra "agricultural"aplicada a terreno poblico porque contaba para ello con ladefinicion clasica establecida en la jurisprudencia, cuandola misma Asemblea tampoco definio la palabra con relaciona terreno privado, es logico inferir que tuvo la mismaintencion, esto es, aplicar la definicion de la jurisprudenciaa ambos tipos de terreno — el publico y el privado. Pensarde otra manera podria ser ofensivo, insultante; podriaequivaler a decir que aquella Asemblea estaba compuestade miembros ignorantes, desconocederos de las reglas elementalesen la tecnica de redaccion legislativa.

Tuve el honor de partenecer a aquella Asemblea comouno de los Delegados por Cebu. Tambien me cupo elhonor de partenecer al llamado Comite de Siete — elcomite encargado finalmente de redactar la ponencia dela Constitucion. No digo que aquella Asemblea estabacompuesta de sabios, pero indudablemente no era inferiora ninguna otra de su tipo en cualquiera otra partedel mundo. Alli habia un plantel de buenos abogados,algunos versados y especialistas en derecho

constitucional.Alli estaba el Presidente de la Universidad de FilipinasDr. Rafael Palma; alli estaba el propio Presidentede la Asemblea Constituyente Hon. Claro M. Recto, conlos prestigios de su reconocida cultura juridica y humanista; alli estaba tambien el Dr. Jose P. Laurel, considerado comouna de las primeras autoridades en derecho constitucionaly politico en nuestro pais. En el Comite de Siete o dePonencia figuraban el actual Presidente de Filipinas Hon.Manuel Roxas; el ex-Senador de Cebu Hon. Filemon Sotto;el Hon. Vicente Singson Encarnacion, lider de la minoria en la primera Asemblea Filipina, ex-miembro de la Comisionde FIlipinas, ex-Senador y ex-Secretario de Gabinete;el ex-Magistrado de la Corte Suprema Hon. NorbertoRomualdez; el actual Secretario de Hacienda Hon. MiguelCuaderno; y el ex-Decano del Colegio de Artes Liberalesde la Universidad de Filipinas, Hon. Conrado Benitez.

No se puede concebir como bajo la inspiracion y guiade estas personas pudiera redactarse el texto de un articuloenque un vocablo — el vocablo "agricultural" — tuviera dosacepciones diferentes: una, aplicada a terrenos publicos;y otra, aplicada a terrenos privados. Menos se concibeque, si fuese esta la intencion, se incurriese en una comisionimperdonable: la omision de una definicion especifica, diferenciadora, que evitase caos y confusion en la mente delos abogados y del publico. Teniendo en cuenta la innegablecompetencia de los Delegados a la Asemblea Constituyentey de sus liders, lo mas logico pensar es que alno definir la palabra "agricultural" y al no diferenciarsu aplicacion entre terrenos publicos y privados, lo hicierondeliberamente, esto es, conla manifiesta intencion dedejar enteramente la interpretacion de la palabra a la luzde una sola comun definicin — la establecida en la jurisprudenciadel asunto tipico de Mapa contra Gobierno Insular y otrossimilares (supra); es decir, que la palabra "agricultural",aplicada a terrenos privados, incluye tambien solaresresidenciales, comerciales, e industriales.

A word or phrase repeated in a statute will bear the same meaning throughout the statute, unless a different intention appears. . . . Where words have been long used in a technical sense and have been judicially construed to have a certain meaning, and have been adopted by the legislature as having a certain meaning prior to a particular statute in which they are used, the rule of construction requires that the words used in such statute should be construed according to the sense in which they have been so previously used, although that sense may vary from the strict literal meaning of the words." (II Sutherland, Stat. Construction, p. 758.)

Pero acaso se diga que la Asemblea Constituyente hadejado sin definir la palabra "agricultural" referente aterreno particular, dando a entendar con su silencio queendosaba la definicion al diccionario o a la usanza popular.La suposicion es igualmente insostenible. ?Por queen un caso se entrega la definicion a la jurisprudencia,y por que en otro al diccionario, o al habla popular?Aparte de que los miembros y dirigentes de la AsembleaConstituyente sabian muy bien que esto causaria unatremenda confusion. Ni los diccionarios, ni mucho menosel lenguaje popular, ofrecen apoyo seguro para una fiely autorizada interpretacion. Si el texto mismo de la ley,con definiciones especificas y casuisticas, todavia ofrecedudas a veces ¿como no el lexico vulgar, con su infinitavariedad de matices e idiotismos?

Ahora mismo ¿no estamos presenciando una confusionn,una perplejidad? ¿Hay acaso uniformidad en la definicionde lo que es un terreno privado agricola? No; cadacual lo define a su manera. Uno de los disidentesel Magistrado Sr. Tuason toma su definicion de la palabra "agricultural " del Diccionario Internacional de Webster que dice . . . "of or pertaining to agricultural connected with, or engaged in, tillage; as the agricultural class; agricultural implements, wages etc." Tambien hacereferncia el mismo Magistrado al concepto popular. Otrodisidente el Magistrado Sr. Padilla dice que "the termprivate agricultural land means lands privately owneddevoted to cultivation, to the raising of agriculturalproducts." El Magistrado Sr Paras no da ninguna definicion;da por definida la palabra "agricultural", al parecer, segunel concepto popular.

Pero, sobre todo, los abogados del apelante definen elvocablo de una manera distinta. Segun ellos, "land spoken of as `agricultural' naturally refers to land not only susceptible of agricultural or cultivation but more valuable for such than for another purpose, say residential,commercial or educational. . . . The criterion is notmere susceptibility of conversion into a farm but its greater value when devoted to one or the other purpose." Demode que, segun esta definicion, lo que determina la calidaddel terreno es su valor relativo, segun que se dedique alcultivo, o a residencia, o al comercio, o a la industria.Los autores de esta definicion indudablemente tienen encuenta el hecho de que en las afueras de las ciudades existenterrenos immensos que desde tiempo inmemorial se handedicado a la agricultura, pero que se han convertido ensubdivisiones multiplicandose su valor en mil por cientosi no mas. De hecho esos terrenos son agricolas; comoque todavia se ven alli los

pilapiles y ciertas partes estancultivadas; pero en virtud de su mayor valor para residencia,comercio e industria se les aquiere colocar fuera dela prohibicion constitucional. En verdad, el criterio nopuede ser mas elastico y convencional, y denota cuanincierta y cuan confusa es la situacion a que da lugar latesis del apelante y de los que le sostienen.

Si hubieramos de hacer depender la definicion de loque es un terreno agricola del concepto popular y de losdiccionarios, asi sean los mejores y mas cientificamente elaborados ¿que normas claras, concretas y definitivasde diferenciacion podrian establecerse? ¿Podrian trazarsefronteras inconfundibles entre lo que es agricola y lo quees residencial, comercial e industrial? ¿Podria hacerseuna clasificacion que no fuese arbitraria? Indudablementeque no. El patron mas usual de diferenciacion es lanaturaleza urbana o rural del terreno; se considera comoresidencial, comercial e industrial todo lo que esta dentrode una urbe, ciudad o poblacion. Pero ¿resolveria esto la dificultad? Proporcionaria un patron exacto, cientifico,no arbitrario? Tampoco. Por que dentro de una ciudado poblacio puede haber y hay terrenos agricolas. Comodijo muy bien el Magistrado Sr. Willard en el asunto clasico de Mapa contraGobierno Insular, "uno de los inconvenientes de la adopcion de este criterio es que es tanvago e indeterminado, que seria muy dificil aplicarlo enla practica. ¿Que terrenos son agricolas por naturaleza? l mismo Fiscal General, en su alegato presentado en este asunto, dice: 'La montaña mas pedregosa y el suelo mas pobre son susceptible de cultivo mediante la mano del hombre'" (Mapa  contra Insular, 10 Jur. Fil.,183). Y Luego el Sr. Willard añade las siguietes observacionessumamente petinentes e ilustratives para una correctare solucion del asunto que nos ocupa, a saber:

. . . Tales terrenos (agricolas, quiere decir) se pueden encontrar dentro de los limites de cualquier ciudad. Hay dentrode la ciudad de Manila, y en la parte densamente poblada de lamisma, una granja experimental. Esta es por su naturaleza agricola. Contigua a la Luneta, en la misma ciudad, hay una gran extension de terreno denominado Camp Wallace, destinada a sports. El terreno que circuda los muros de la ciudad de Manila, situado entre estos y el paseo del Malecon por el Sur y Este contiene muchas hectareas de extension y es de naturaleza agricola. La Luneta misma podria en cualquier tiempo destinarse al cultivo.

La dificultad es mayor tratanndose de diferenciar unterreno agricola de un terreno industrial. En este respectoes preciso tener en cuenta que un terreno industiralno tienee que ser necesariamente urbano; en realidad,la tendencia moderna es a situar las industrias fuera deas ciudades en vastas zonas rurales. Verbigracia; anpredor de la famosa cascada de Maria Cristina en Lanao existen grandes extensiones de terreno agricola, algunasde propiedad particular. Cuando, se industrialice aquellaformidable fuerza hidraulica bajo el llamado Plan Beyster ¿que normas segfuras se podrian establecer para poner envigor la prohibicion constitucional fuese burlada enajenandosetierras agricolas de propiedad privada a favorde extranjeros, ya sean individuos, ya sean corporacioneso asociaciones, so pretexto de ser industriales?

Resulta evidence de lo expueto que los redactores denuetra Constitucion no pudienron haber tenido la idea deque el articulo XIII fuera interpretado a la luz de ese criterio vago e indeterminado que llama el Sr. Willard. Es mas logico pensar que el criterio que ellos tenian enla mente era el criterio establicido en la jurisprudencia sentada en el asunto clasico de Mapacontra Gobierno y otros asuntos concomitantes citados — criterio mas frime, mas seguro, menos expuesto a confusion y arbitrariedad, y sobre todo, "que ofrece menos inconvenientes", parafraseando otra vez al Magistrado Sr. Willard, (supra, p. 185).

Otro serio inconveniente, La seccion 3, articulo XIIIde;la Constitucion, dispone que "el Congreso puedo determinarpor ley l;a eextension superficial del terrenoprivado agricola que los individous, corporaciones o asociaciones pueden adquirir y poseer, sujeto a los derechos existentes antes de la aprobacion de dicha ley." Si seinterpretase que la frase "private agricultural land" noincluye terrenos residenciales, comerciales e industriales,entonces estas ultimas clases de yterreno quedarian excluidas de la facultad reguladora concedida por la Constitucion al Congreso mediante dicha seccion 3. Entoncesun individuo o una corporacion podrian ser dueños de todoslos terrenos de una ciudad; no habria limite a las adquisicionesy posesiones en lo tocante a terrenos residenciales,comerciales e industriles. Esto parece absurdo, peroseria obligada consecuencia de la tesis sustentada por elapelante.

Se hace hincapie en el argumento de que el el procesode tamizacion del articulo XIII durante las deliberacionesde la Asamblea Constituyente y de los Comites de Ponnnnenciay de estilo al principio no figuraba el adjetivo "agricola"en la seccion 5, diciendose solo "terreno privado" y quesolo mas trade se añadio la palabra calificativa agricola—"private

agricultural land" De este se quiere inferir quela adicion de la palabra "agricultural" debio de ser poralgun motivo y este no podia ser mas que el de que sequiso excluir los terrenos residenciales comerciales e industriales, limitandose el precepto a los propia o estrictamenteagricolas.

La deduccion es incorrecta y sin fundamento. No cabedecir que la adicion de la plabra "agricultural" en estecaso equivale a excuir los terrenos residenciales, comercialese industriales, por la sencilla razon de que la Constitucion no solo no define lo que es residencial comercial e industrial, comercial e industrial. En cambio ya hemosvisto que la palabra "agricultral" tiene una significaciontradicionalmente bien establecida en nuestra jurisprudenciay en nuestro vocabulario juridico: incluye no solo terrenoscultivados o susceptibles fe cultivo, sino tambien residencialescomerciales e industriales. Se admite por todo elmundo que la palabra tiene tal significacion en el articuloXIII, seccion 5, de la Constitucion, en cuanto se refierea terreno publico. Ahora bien; ¿que diferencia hay, despuesde todo, entire un terreno publico agricolo y uno sea a la calidad de agricola, absolutamente ninguna.Uno no es mas menois agricola que el otro. La unicadiferencia se refiere a la propiedad, al titulo dominical — en que el uno es del Estado y el otro es de un particular.

En realidad, creo que la diferencia es mas bien psicologica,subjetiva — en que vulgarmente hablando pareceque los conceptos de "agricola" y "residencial" se repelen.No se debe menospreciar la influencia del vulgo en algunascosas; en la misma literatura el vulgo juega su papel; digasi no la formacion popular del romancero. Pero es indudable que cietas cosas estan por encima del conceptovulgar — una de estae la interpretacion de la leyes, lahermeneutica legal. Esto no es exagerar la importancia de la tecnica sino que es simplemente colocar las cosasensu verdadero lugar. La interpretacion de la ley es unafuncion de minoria — los abogados. Si no fuera asi paraque los abogados? ¿Y para que las escuelas de dercho,y para que los exmenes, cada vez mas rigidos, para de purar el alma de la toga, que dijo un gran abogado español?6 Asi que cuando decimos que el precepto constitucional en cuestion debe interpretatarse tecnicamente, a la luz de la jurisprudencia, por ser ello el metodo mas seguro para hallar la verdad judicial, no importa que ello repugne al concepto vulgar a simple vista, no ponemos,en realidad, nionguna pica en Flandes, sino que propugnamos una cosa harto elememntal por lo sabida.

Por tanto no es necesario especular o devanarse lossesos tratando de inquirir por que en la tamizacion delprecepto se añadio el adjetivo 'agricultural" a las palabras"private land" en vez de dejarlas solas sin cualificacion.Algunos diran que fue por razon de simentria para hacer"pendant diran que fue por razon de simetria para hacer"pendant" con la frase "public agricultural land" puestamas arriba. Pero esto np tiene ninguna importancia. Loimportante es saber que la añadidura, tal como esta jurisdiccion, de la palbra "agricultural" empleada en dicho texto. Eso es todo; lo demas creo que es puro bizantinis mo.

III. Cero que una examen de los documentos y debatesde la Asamblea Constituyente para ver de inquirir la motivacion y finalidad del precepto constitucional que nos ocupapuede ayudar grandemente y arrojar no poca luz en lainterpretacion de la letra y espiritu de dicho precepto.Este genero de inquisicion es perfectamente propio y permisible en hermeneutica constitucional, y se ha hechosiempre, segun las majores autoridades sobre la materia. Cooley, en su authorizado tratado sobre Limitaciones Constitucionales (Constitutional Limitations) dice a este efectolo sigiuente:

When the inquiry is directedto ascertaining the mischief designed to be remedied, or thepurpose sought to be accomplished by a particular provision, it may be proper to examine the proceedings of the convention which framed the instrument. Where the proceedings clearly point out the purpose of the provision, the aid will be valuable and satisfactory; but where the question is one of abstract meaning, it will be difficult to derive from this source much reliable assistance in interpretation. (1 Cooley on Constitutional Limitations [8th ed.], p. 142.)

¿Que atmosfera prevalecia en la Asamblea sobre elproblema de la tierra en general sobre el problema capitalismo de los terrenos naturales? ¿Cual era la tendenciapredominante entre los Delegados? Y ¿como era tambienel giro de la opinion, del sentimiento publico es decir comoera el pulso del pueblo mismo del cual la Asamblea despuesde todo no era mas que organo e interprete?

Varios discursos sobre el particular se pronounciaronen la Asamblea Constituyente. El tono predomionante entodos ellos era un fuerte, profundo nacionalismo. Tanto dentro como fuera de la Asamblea Constituyente era evidente, acusado, el afan unanime y decidido de conservar el patrimonio nacional no solo para las presentes generaciones filipinas, sino tambien para

la posteridad. Y patrimonio nacional tenia, en la mente de todos un significadocategorio e indubitable; significion de si es dedominio publico o privado. Muestras tipicas y representativas de este tono pecular y dominantes de la ideologiaconstituyente son ciertas m,anifestaciones que constanen el diario de serines has en el curso de los debateso en el proceso de la redaccion del proyecto constitucionalpor Delegados de palabra autorizadam bien por su significacion personal bein por el papel particula que desempeñaban en las treas constituyentes. Por ejemplo el Delegado Montilla por Negros Occidental, conspicuo representante del agro, usando del privilegio de madia horaparlamentaria dijo en parte lo siguinte:

. . . Con la completa nacionnalization de nuestras tierras y recursos natural debe entenderse que nuetro patrimonio nacional debe estar vinculado 100 por 100 en manos filipinas. Tierras y recursos naturales son inm,uebles y como tales pueden compararse con los organos vitales del cuerpo de una persona: la falta de posesion de los mismo puede caussar la muete instantannea o el abreviamiento de la vida (Diario de Sesiones Asamblea Constituyente, inedita, "Framing of the Constitution," tit. 2 0 pag. 592 Libro del Profesor Aruego).

Como se ve el Delegado Montilla habla de tierras sin adjetivacion, es decir sin difenciar entre propiedad publica y privada.

El Delgado Ledesma, por Iloilo, otro conspicuo representante del agro presidente del comte de agricultura de la Asamblea que los extramnjeros no podian ser mismas palabras:

La exclusion de los extranjeros del privilegio de adquirir terrenos publicos agricolas y de poder se dueños de propiedades inmuebles (real estate) es una parte necesaria de las leyes de terrenos publicos de Filipinas para mantener firme la idea de conservar Filipinaspara los filipos' (Diario de Sesiones, id.; Libro de Aruego, supra, pag. 593.)

Es harto significtativo que en el informe del Colite de Nacionalizacion y Conservacion de Recursos Naturales de la Asamblea Constituyente la plabra tierra (land) se usa generricamente sin cualificacion de publica o privada. Dice el Comite:

Que la tierra, los minerales los bosques y otros recursos naturalesconstituyen la herencia exclusiva de la nacion filipina. Deben,por tanto, ser conservados para aquellos que se halian bajo la autoridad soberana de esa nacion y para su posteridad. (Libro de Aruego,supra, pag. 595.)

La conservacion y fomento del patrimonio nacional fue una verdadera obsesion en la Asamblea Constituyente. Sus mienbros que todavia viven recordaran l;a infinita paciencia, el esmero de orfe breria con que se trabajo el preambulo de la Constitucion. Cada frase, cada concepto se sometio a un rigido proceso de seleccion y las gemas resultans es la labor benedictina una de las gemas redel patrimonio nacional. He aqui el preambulo:

The Filipino people, imploring the aid of Divene Providence,in order to establish a government that shall enbody their ideals, conserve and develop the patrimony of the nation, promote the general welfare, and secure to themslves and their posterity the blessings of independence under a regime of justice, liberty, and democracy, do ordain and promulgate this Constitution.

El espiritu fuertemente nacionalista que saturaba la Asamblea Constituyente con respecto a la tierre y recursosnaturales es de facil explicacion. Estabamos escribiendouna Constitucion no solo para el Commonwealth, sino tambien para la republica que advendria despues de10 años. Querianos, puesd asegurar firmemente las basesde nuestra nacionalidad. ¿Que cosa major para ello quebildar por los cuatro costrados el cuerpo dela mnacion delcual — parodiando al Delegado Montilla — la tierra y losresoursos naturales son como organos vitales cuya perdidapuede causar la muerte instantanea o el abreviamiento dela vida?

Para aprociar el pulso de la nacion en aquel memontohistorico es preciso tener en cuenta las cirucmstancias.Nos debamos perfecta cuenta de nuetra posicion geografica,asi como tambien de nuestras limitaciones demograficas.Se trataba, por ciento de una conciencia agudamenteatormentadora y alarmante. Estabamos roodeadosde enormes mesas humanas — centenares de milliones — economica y biologicamente agresivas, avidad de desbordarsepor tadas partes, poir las areas del Pafico particularmente,en busca de espacio vitales. China, Japon-Japon, sobretodo que estaba entonces en el apogeo de su delirio deengrandecimiento economico y militarista. Teniamos apantadoal mismo corazon, como espada rutilante de Samurrai,el pavoroso problema de Davao, donde, por errores incialesdel Gobierno, Japon tenia el control de la tierra, instituyendos alli

una especie de Japon en miniatura, con todaslas amenasas y peligros que ello implicaba para la integridadde nuestra existancia nacional. Como que Davaoya se llamaba popular y sarcasticamente Davaoko, entragica rima con Manchuko.

Tambien nos obsesionaban otras lecciones dolorosas dehistoria contemporanea. Texas, Mejico, Cuba y otraspaises del Mar Caribe y de la America Latina que todaviaexpiaban, como una terrible maldicion el error de susgobernantes al permitir la enajenacion del suelo a extranjeros.

Con el commercio y la industria principalmente en manosno-filipinas, los Delegados a la Constituyente se haciancargo tambien de la vitalisima necesidad de, por lo menos,vincular el apatrimonio nacional, entre otras cosas la tierra, en manos de los filipinos.

Que de extraño habia, pues, que en semejante atmosfera y tales circumstancias se aprobase un articulo rigidamentenacionalismta como es el Article XIII? La motivacion y finalidad, como ya se ha dicho, era triple: (a)consetvar el patrimonio nacional para las presentes yfuturas generaciones filipinas; (b) vincular, por lo menos,la propiedad de la tierra y de los recursos naturales en manos filipinas como la mejor manera de mantener elequilibrio de un sistema economico dominado principalmente por extranjeros en virtud de su tecnica (know-how) superior y de su abudancia de capitales: (c) prefictos y complicaciones internacionales.

No se concibe que los Delegados tuvieran la intercionde excluir del precepto los terrenos residenciales comercialese industrial, pues sabian muy bien que los finesque se trataban de conseguir y los peligros quie se trataban de evitar con la politica de nacionalizacion y conservacionrezaban tanto para una clase de terrenos como para otra. ¿Por que se iba a temer, verbigracia, el dominio extranjero sobre un terreno estrictamente, agricola, sujeto a cultivo, y no sobre el terreno en que estuviera instalada unaformidable industria o fabrica?

Otro detalle significativo. Era tan vigoroso el sentimiento nacionalista en la Asamblea Constituyente que, noobstante el natural sentimiento de gratitud que nos obligabaa favor de los americanos., a estos no se les concedioningun privilegio en relacion con la tierra y demas recusosnaturales, sino que se les coloco en el mismo plano que alos otros extranjeros. Como que ha habido necesidad deuna reforma constitucional — la llmada reforma sobre laparidad — para equipararlos a los filipinos.

The mere literal construction of a section in a statute ought not to prevail if it is opposed to the intention of the legislature apparent by the statute; and if the words are sufficiently flexible to admit of some other construction it is to be adopted to effectuate that intention. The intent prevails over the letter, and the latter will, if possible, be so read as to conform to the spirit of the act. While the intention of the legislature must be ascertained from the words used to express it, the manifest reason and the obvious purpose of the law should not be sacrificed to a literal interpretation of such words. (II Sutherland, Stat. Construction, pp. 721, 722.)

IV. — Se insinua que no debieramos declarar que laConstitucion excluye a loc extranjeros de la propiedadsobre terrenos residenciales e industriales,porque ello imposibilitaria toda accion legislativa en sentidocontrario para el caso de que el Congreso Ilegagealguna vez a pensar que semejante interdiccio debialevantarse. Se dice que es majes y mas conveniente dejaresta cuestion en manos del Congreso para que haya maselasticidad en las soluciones de los diferentes problemassobre la tierra.

Cometeriamos un grave error si esto hicieramos. Estaes una cuestion constitucional por excelencia. Solamenteel pueblo puede disponer del patrimonio nacional. Ni el Congreso, ni mucho menos los tribunales, pueden disponerde ese patrimonio. Lo mas que puede hecer el Congreso es proponer una reforma constitucional mediante los votosde tres cuartas (3/4) de sus miembros; y el pueblo tienela ultima palabra que se expresara en una eleccion oplebiscito convocado al efecto.

El argumento de que esto costaria dinero es insostenible. Seria una economia mal entendida. Si no se escatiman gastos para celebrar elctiones ordinarias periodicamente ¿como ha del pueblo en un asunto tan vital como es la disposicion del patrimonio nacional, base de su mismaexistencia? para reformar la Constitucion, apoyado portres cuartas (3/4) del Congreso, por lo menos.

En el entretanto el articulo XIII de la Constitucion debequedar tal como es, e interpretarse en la forma como lo interpretamos en nuestra decision.

Se confirma la sentencia.

PARAS, J., dissenting:

Section 5 of Article XIII of the Constitution provides that "save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines." The important question that arises is whether private residential land is included in the terms "private agricultural land."

There is no doubt that under section 1 of Article XIII of the Constitution, quoted in the majority opinion, lands of the public domain are classified into agricultural, timber,or mineral. There can be no doubt, also, that public lands suitable or actually used for residential purposes, must of necessity come under any of the three classes.

But may it be reasonably supposed that lands already of private ownership at the time of the approval of the Constitution, have the same classification? An affirmative answer will lead to the conclusion — which is at once absurd and anomalous — that private timber and mineral lands may be transferred or assigned to aliens by a mode other than hereditary succession. It is, however, contended that timber and mineral lands can never be private, and reliance is placed on section 1, Article XIII, of the Constitution providing that "all agricultural, timber and mineral lands of the public domain . . . belong to the State," and limiting the alienation of natural resources only to public agricultural land. The contention is obviously untenable. This constitutional provision, far from stating that all timber and mineral lands existing at the time of its approval belong to the State, merely proclaims ownership by the Government of all such lands as are then of the public domain; and although, after the approval of the Constitution, no public timber or mineral land may be alienated, it does not follow that timber or mineral lands theretofore already of private ownership also became part of the public domain. We have held, quite recently, that lands in the possession of occupants and their predecessors in interest since time immemorial do not belong to the Government, for such possession justifies the presumption that said lands had been private properties even before the Spanish conquest. (Oh Cho vs. Director of Lands, 43 Off. Gaz., 866.) This gives effect to the pronouncement in Cariño vs. Insular Government (212 U.S., 446; 53 Law. ed., 594), that it could not be supposed that "every native who had not a paper title is a trespasser." It is easy to imagine that some of such lands may be timber or mineral. However, if there are absolutely no private timber or mineral. However, if there are absolutely no private timber or mineral lands, why did the framers of the Constitution bother about speaking of "private agricultural land" in sections 3 and 5 of Article XIII, and merely of "lands" in section 4?

SEC. 3. The Congress may determine by law the size of private agricultural land which individuals, corporations, or associations may acquire and hold, subject to rights existing prior to the enactmentof such law.

SEC. 4. The Congress may authorize, upon payment of just compensation, the expropriation of lands to be subdivided into small lots and conveyed at cost to individuals.

SEC. 5. Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

Under section 3, the Congress may determine by law the size of private agricultural land which individuals, corporations, or associations may acquire and hold, subbject to rights existing prior to the enactment of such law, and under section 4 it may authorize, upon payment of just compensation, the expropriation of lands to be subdivided into small lots and conveyed at cost to individuals. The latter section clearly negatives the idea that private lands can only be agricultural. If the exclusive classification of public lands contained in section 1 is held applicable to private lands, and , as we have shown, there may be private timber and mineral lands, there would be neither sense nor justification in authorizing the Congress to determine the size of private agricultural land only, and in not extending the prohibition of section 5 to timber and mineral lands.

In may opinion, private lands are not contemplated or controlled by the classification of public lands, and the term "agricultural" appearing in section 5 was used as it is commonly understood, namely, as denoting lands devoted to agricultural. In other words, residential or urban lots are not embraced within the inhibition established in said provision. It is noteworthy that the original draft referred merely to "private land." This certainty would have been comprehensive enough to included any kind of land. The insertion of the adjective "agricultural " is therefore significant. If the Constitution prohibits the alienation to foreigners of private lands of and kind, no legislation can ever be enacted with a view to permitting limited areas of land for residential, commercial, or industrial use, and said prohibition may readily affect any effort towards the attainment of rapid progress in Philippine economy. On the other hand, should any danger arise from the absence of such constitutional prohibition, a law may be passed to remedy the situation, thereby enabling the Government to adopt such elastic policy as may from time to time be necessary, unhampered by any inconveniences or difficulties in amending the Constitution. The power of expropriation is, furthermore, a handy safeguard against undersirable effects of unrestricted alienation to, or ownership by, aliens of urban properties. The majority argue that the original draft in which the more general terms "private land" was used, was amended in the same that the adjective "agricultural" was inserted in order merely "to clarify concepts and avoid uncertainties" and because, as under section 1, timber and mineral lands can never be private, "the prohibition to transfer the same, would be superfluous." In answer, it may be stated that section 4 of Article XIII, referring to the right of expropriation, uses "lands" without any qualification, and it is logical to believe that the use was made knowingly in contradistinctions with the limited term "private agricultural land" in section 3 and 5. Following the line of reasoning of the majority, "lands" in section 4 necessarily implies that what may be expropriated is not only private agricultural land but also private timber and mineral lands, as well, of course, as private residential lands. This of course tears apart the majority's contention that there cannot be any private timber or mineral land.

Any doubt in the matter will be removed when it is, borne in mind that no less than Honorable Filemon Sotto, Chairman of the Sponsorship Committee of the Constitutional Convention, in supporting section 3 of the Article XIII, explained that the same refers to agricultural land,and not to urban properties, and such explanation is somewhat confirmed by the statement of another member of the Convention (delegate Sevilla) to the effect that said section "is discriminatory and unjust with regard to the agriculturists."

Sr. SOTTO (F) Señor Presidente: "Que hay caballeros de laConvencion en el fondo de esta cuestion al parecer inocente yordinaria para que tanto revuelo haya metido tanto en la sesion de ayer como en la de hoy? Que hay de misterios en el fondo de este problem, para que politicos del volumen del caballero por Iloilo y del caballero por Batangas, tomen con gran interes una macion para reconsiderar lo acordado ayer? Voy a ser frio, señores. Parece que es meyor tratar estas cuestiones con calma y no apasionamiento. He prestado atencion, como siempre suelo hacer a todos los argumentos aqui en contra del precepto contenido en el draft y a favor ahora de la reconsideracion y siento decir lo siguiente; todos son argumentos muy buenos aposteriori. Cuando la Asamble Nacional se haya reunido, sera la ocasion de ver si procede o no expropiar terrenos o latifundios existentes ahorao existentes despues. En el presente, yo me limito a invitar la atencion de la Convencion al hecho de que el procepto no tome las medidas necesarias en tiempo oportuno, cuando el problema del latifundismo se haya presentado con caracterres tales que el beinestar, interes y orden publico lo requieran. Permitame la Convencion que lo discuta en globo las dos pates del articulo 9. Hay tal engranaje en los dos mandatos que tiene dicho precepto, hay tral eslabon en una u otra parte que es imposible, que es dificil que quitaramos deslindes si nos limitasemos a considerar una sola parte. La primera parte autoriza a la legislatura para fijar el limite maximo de propiedad agricola que los ciudadanos particulares puede tener. Parece que es un punto que ha pasado desapercibido. No se trata aqui ahora de propiedades urbanas, sino de propiedades agricolas, y es por la razon de que con mucha especialidad en las regiones agricolas, en las zones rusticas es donde el latifundismo se extiende con facilidad, y desde alli los pequeños propietariou precisamente para ahogarles y para intilizarles. Esta pues, a salvo completamente la cuestion de las propiedades urbans. Cietos grandes soleres de nuestras ciudaes que con pretexto de tener cietos eficios, que en realidad no necesitan de tales extensos solares para su existencia ni para su mantenimineto, puedan dormir transquilos. No Vamos contra esas propiedades. Por una causa o por otra el pasado nos legardo ese lastre doloroso. Pero la region agricola, la region menos explotada por nuetro pueblo, la region que necesitamos si

queremos vivir cuenta propia la region que es el mayor incentivo no para solo para los grandes capitalistas de fuera merece todos los ciudados del gobierno.

Voy a pasar ahora a la relacion que tiene la seggunda parte de la enmiendad con la primera. Una vez demostrado ante la Lehgislatura, una vez convencida la Asamblea Nacional de que existe un latifundismo y que este laitifundismo puede producir males e esta produciendo daños a la comunidad, es cuando entonces la Legislatura puede acordar la expropiacion de los latifundios. Donde esta el mal que los opositores a este es un postulado que todos conocen. Bien, voy a admitir para los propositos del argumento que hoy no existen laifundios, y si los opostores al precepto quieren mas vamos a convenir en que no existrian en el futuro. Pues, entonces, donde este el temor de que el hijo de tal no pueda recibir la herencia de cual? Por lo demas el ejemplo repetidas veces presentado ayer yhoy en cuanto al herdero y al causahabiente no es completamente exacto. Vamos a suponer que efectivamente un padre de familia posee un numero tal de hectareas de terreno, superior o exedente a lo que fija la ley. Creen los Caballeros, creen los opositorees al precepto que la Legislatura, la Asamblea Nacional va a ser tan imprudente, tan loca que inmediatemente disponga por ley que aquella porcion excedente del terreno que ha de recibir un hijo de su padre no podra poseerlo, no podra tenerlo o recibirlo el heredero.

Esa es una materia para la Asamblea Nacional. La asamblea Nacional sabe que no puede dictar leyes o medidas imposibles de cumplir. Fijara el plazo, fijara la proporcion de acuedo con las circunstancias del tiempo entonces en que vivamos. Es posible que ahora un numero determinado de hectereas sea excesivo; es posible que por desenvolvimientos economics del paius ese numero de hectareas puede ser elevado o reducido. Es por esto porque el Comite precisamente no ha querido fijar desde ahora el numero de hectareas presamente no ha querido fijar desde ahora el numero de hectareas, prefireindo dejar a la sabiduria, a la prudencia, al patriotismo y a la justicia de la Asambela Nacional el fijar ese numero.

Lomismo digo de la expropiacion. Se habla de que el gobierno no tendra dinero; se hablqa de que no podra revender las propieedades. Pero, Caballeros de la Convencion, caballeros opositores del precepto; si la Legislatura, si la AsambleaNacional estuviera convencida de que el gobierno no puede hecer una exporpiacion, va a hecerlo? La Asamblea Nacional dictara una ley autorizando la expropiacion de tal a cual latifundio cuando este convencida, primero, de que la existencia de ese latifundio es amenazante para el publico; y segundo, cuando la asamblea Nacional este convencida de que el gobierno esta disposicion para disponer la expropiacion.

Visto, pues, desde este punto el asunto, no es malo autorizar,fijar los limites, ni macho menos es malo autorizar a la Legislatura para dictar leyes de expropiacion.

Pero voy a molestaros por un minuto mas. Se ha mentado aquicon algun exito esta mañana — y digo con exito porque he oidoalgunos aplausos — se ha mentado la posibilidad de que los comunistas hagan un issue de esta disposicion que existe en eldraft; podran los comunistas pedir los votos del electorado para ser elloslos que dicten las leyes fijando el limite del terreno y ordenen la expropriacion? ¡Que argumento mas bonito si tuviera base! Lo mas natural, creo yo, es que el pueblo, el electorado, al ver queno es una Asamblea Constituyente comunista la que ha puestoesta disposicion, otorgue sus votors a esta misma Asamblea Nacional, o a esos condidatos no comunistas. ¿Quien esta en disposicion de terminar mejor una obra aquel que trazado y puesto los primeros pilares, o aquel que viene de gorra al final de la obra para decir: "Aqui estoy poner el tejado?"

Es sensible, sin embargo, que una cuetion de importancia tannacional como este, pretendamos ligarla a los votos de los comulites de terreno; no ha de venir porque nosotros fijemos loslimites de terreno; no ha de venir porque prohibamos los latifundiosmediante expropiacion forzosa, no; ha de venir precisamentepor causa de los grandes propietarios de terreno, y ha de venir,queramoslo o no, porque el mundo esta evolucionando y se va aconvencer de que la vida no es solamente para unos cuantos sinopara todos , porque Dios no la dio, con la libertad, el aire, la luz,la tierra para vivir (Grandes Aplausosz), y por algo se ha dichoque en los comienzos de la vida himana debio haber sido fusilado,matado, a aquel primero que puso un cerco a un pedazo de tierrareclamando ser suya a propiedad.

Por estas razones, señor Presidente, y sintiendo que mi tiempoesta para terminar, voy a dar fin a mi discurso agradeciendo a la Convencion. (Speech of Delegate Sotto.)

I would further add, Mr. President, that this precept by limiting private individuals to holding and acquiring lands, private agricultural lands . . . is discriminatory and unjust with regard to the agriculturists. Why not, Mr. President, extend this provision also to those who are engaged in commerce and industries? Both elements amass wealth. If the purpose of the Committee, Mr. President, is to distribute the wealth in such a manner that it will no breed discontent, I see no reason for the discrimination against the agricultural. In view of these reasons, Mr. President, I do not want to speak further and I submit this amendment because many reasons have been given already yesterday and this morning. (Speech of Delegate Sevilla.)

Delegate Sotto was not interpellated, much less contradicted, on the observation that section 3 of Article XIII does not embrace private urban lands. There is of course every reason to believe that the sense in which the terms "private agricultural lands" were employed in section 3 must be the same as that in section 5, if consistency is to be attributed to the framers of the Constitution.

We should not be concluded by te remarks, cited in the majority opinion, made by Delegate Ledesma to the effect that "the exclusion of aleins from the private of acquiring public agricultural lands and of owning real estate is a necessary part of the Public Land Laws," and of the statement of Delegate Montilla regarding "the complete nationalization of our lands and natural resources," because (1) the remarks of Delegate Ledesma expressly mentions "public agricultural lands" and the terms "real estate" must undoubtedly carry the same meaning as the preceding words "public agricultural lands", under the principle of "ejusdem generis"; (2) Delegate Ledesma must have in mind purely "agricultural" lands, sicne he was the Chairman of the Committee on Agricultural Development and his speech was made in connection with the national policy on agricultural lands; (3) the general nature of the explanations of both Delegate Ledesma and Delegate Montilla, cannot control the more specific clarification of Delegate Sotto that agricultural lands in section 3 do not include urban propeties. Neither are we bound to give reater force to the view (apparently based on mere mental recollections) of the Justices who were members of the Constitutional Convention than tot he specific recorded manifestation of Delegate Sotto.

The decision in the case of Mapa vs. Insular Government (10 Phil., 175), invoked by the majority, is surely not controlling, because, first, it dealt with "agricultural public lands" and, secondly, in that case it was expressly held that the phrase "agricultural land" as used in Act No. 926 "means those public lands acquired from Spain which are not timber or mineral lands," — the definition held to be found in section 13 of the Act of Congress of July 1, 1902.

We hold that there is to found in the act of Congress a definition of the phrase "agricultural public lands," and after a carefully consideration of the question we are satisfied that the only definition which exists in said act is the definition adopted by the court below. Section 13 says that the Government shall "make rules and regulations for the lease, sale or other disposition of the public lands other than timber or mineral lands." To our minds that is the only definition that can be said to be given to agricultural lands. In other words, that the phrase "agricultural land" as used in Act No. 926 means those public lands accquired from Spain which are not timber or mineral lands. (Mapa vs. Insular Government, 10 Phil., 182.)

The majority, in support of their construction, invoke Commonwealth Act No. 141, enected after the approval of the Constitution, which prohibits the alienation to foreigners of "land originally acquired in any manner under the provisions of this Act," (section 122) or "land originally acquired in any manner under the provisions of any previous Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippines with regard to public lands, terrenos baldios realengos, or lands of any other denomination that were actually or presumptively of the public domain." (Section 123.) They hold that the constitutional intent "is made more patent and is strongly implemented by said Act." The majority have evidently overlooked the fact that the prohibition contained in said sections refer to lands originally acquired under said sections referto land originally acqured under said Act or otherlegal provisions lands, which of course do not include lands not originally of the public domain. The lands that may be acquired under Act No. 141 necessarily have to be public agricultural lands, since they are the only kinds that are subject to alienation or disposition under the Constitution. Hence, even if they become private, said lands retained their original agricultural character and may not

therefore be alienated to foreigners. It is only in this sense, I think, that act No. 141 seeks to carry out and implement the constitutional objective. In the case before us, however, there is no pretense that the land bought by the appellant was originally acquired under said Act or other legal provisions contemplated therein.

The majority is also mistaken in arguing that "prior to the Constitution, under section 24 of the Public Land Act No. 2874 aliens could acquire public agricultural lands used for industrial or residential purposes, but after the Constitution and under section 23 of Commonwealth Act No. 141, the right of aliens to acquire such kind of lands is completely stricken out, undoubtedly in pursuanceof the Constitutional limitation," and that "prior to the Constitution, under section 57 of the Public Land Act No.2874, land of the public domain suitable for residence or industrial purposes could be  sold or leased to aliens, but after the Constitution and under section 60 of Commonwealth Act No. 141, such land may only be leased, but not sold, to aliens, and the lease granted shall only be valid while the land is used for the purpose referred to." Section 1 of article XIII of the Constitution speaks of "public agricultural lands" and quite logically, Commonwealth Act No. 141, enacted after the approval of the Constitution, has to limit the alienation of its subject matter (public agricultural land, which includes public residential or industrial land) to Filipino citizens. But it is not correct to consider said Act as a legislation on, or a limitation against, the right of aliens to acquire residential land that was already of private ownership prior to the approval of the Constitution.

The sweeping assertion of the majority that "the three great departments of the Government — Judicial, Legislative and Executive — have always maintained that lands of the public domain are classified into agricultural, mineral and timber, and that agricultural lands include residential lots," is rather misleading and not inconsistent, with our position. While the construction mistakenly invoked by the majority refers exclusively to lands of the public domain, our view is that private residential lands are not embraced within the terms "private agricultural land" in section 5 of Article XIII. Let us particularize in somewhat chronological order. We have already pointed out that the leading case of Mapa vs. Insular Government, supra,only held that agricultural public lands are those public lands acquired from Spain which are neither timber nor mineral lands. The opinion of the Secretary of Justice dated July 15, 1939, quoted in the majority opinion, limited itself in affirming that "residential, commercial or industrial lots forming part of the public domain . . . must be classified as agricultural." Indeed, the limited scope of said opinion is clearly pointed out in the following subsequent opinion of the Secretary of Justice dated September 25, 1941, expressly hoding that "in cases involving the prohibition in section 5 of Article XIII (formerly Article XII) regarding transfer or assignment of private agricultural lands to foreigners, the opinion that residential lots are not agricultural lands is applicable."

This is with reference to your first indorsement dated July 30, 1941, forwarding the request of the Register of Deeds of Oriental Misamis for an opinion as to whether Opinion No. 130, dated July 15, 1939, of this Department quoted in its Circular No. 28, dated May 13, 1941, holding among others, that the phrase "public agricultural land" in section 1, Article XIII (formerly article XII) of the Constitution of the Philippines, includes residential, commercial or industrial lots for purposes of their disposition, amends or supersedeas a decision or order of the fourth branch of the Court of First Instance of the City of Manila rendered pursuant to section 200 of the Administrative Code which holds that a residential lot is not an agricultural land, and therefore, the prohibition in section 5, Article XIII (formerly Article XII) of the Constitution of the Philippines does not apply.

There is no conflict between the two opinions.

Section 1, Artcile XIII (formerly article XII of the Constitution of the Philippines, speaks of  public agricultural lands while section 5 of the same article treats of private agricultural lands. A holding, therefore, that a residential lot is not private agricultural land within the meaning of that phrase as found in section 5 of Article XIII (formerly Article XII) does not conflict with an opinion that residential, commercial or industrial lots forming part of the public domain are included within the phrase "public agricultural land" found in section 1, Article XIII (formerly Article XII) of the Constitution of the Philippines. In cases involving the prohibition in section 5 of Article XIII (formerly Article XII) regarding transfer or assignment of private agricultural lands to foreigners, the opinion that residential lots are not agricultural lands is applicable. In cases involving the prohibition in section 1 of Article XIII (formerly Article XII) regarding disposition in favor of, and exploitation, development or utilization by foreigners

of public agricultural lands, the opinion that residential, commercial or industrial lots forming part of the public domain are included within the phrase "public agricultural land" found in said section 1 of the Article XIII (formerly Article XII) governs.

Commonwealth Act No. 141, passed after the approval of the Constitution limited its restriction against transfers in favor of alien to public agricultural lands or to lands originally acquired under said Act or other legal provisions formerly in force in the Philippines with regard to public lands. On November 29, 1943, the Court of Appeals rendered a decision affirming that of the Court of First rendered a decision affirming that of the Court of First Instance of Tarlac in a case in which it was held that private residential lots are not included in the prohibition in section 5 of Article XIII. (CA-G. R. No. 29.) During theJapanese occupation, the Constitution of the then Republic of the Philippines contained an almost verbatim reproduction of said section 5 of Article XIII; and the then National Assembly passed an Act providing that "no natural or juridical person who is not a Filipino citizen shall acquire directly or indirectly any title to private lands (which are not agricultural lands) including buildings and other improvements thereon or leasehold rights on said lands, except by legal succession of proper cases, unless authorized by the President of the Republic of the Philippines." (Off. Gaz., Vol. I, p. 497, February,1944.) It is true that the Secretary of Justice in 1945 appears to have rendered an opinion on the matter, but it cannot have any persuasive force because it merely suspended the effect of the previous opinion of his Department pending judicial determination of the question. Very recently, the Secretary of Justice issued a circular adopting in effect the opinion of his Department rendered in1941. Last but not least, since the approval of the Constitution, numerous transactions involving transfers of private residential lots to aliens had been allowed to be registered without any opposition on the part of the Government. It will thus be seen that, contrary to what the majority believe, our Government has constantly adopted the view that private residential lands do not fall under the limitation contained in section 5 of Article XIII of the Constitution.

I do not question or doubt the nationalistic spirit permeating the Constitution, but I will not permit myself to be blinded by any sentimental feeling or conjectural considerations to such a degree as to attribute to any of its provisions a construction not justified by or beyond what the plain written words purport to convey. We need not express any unnecessary concern over the possibility that entire towns and cities may come to the hands of aliens, as long as we have faith in our independence and in our power to supply any deficiency in the Constitution either by its amendment or by Congressional action.

There should really have been no occasion for writing this dissent, because the appellant, with the conformity of the appellee, had filed a motion for the withdrawal of the appeal and the same should have been granted outright. In Co Chiong vs. Dinglasan (p. 122, ante),decided only a few days ago, we reiterated the well-settled rule that "a court should not pass upon a constitutional question and decide a law to be unconstitutional or invalid unless such question is raised by the the parties, and that when it is raised, if the record also presents some other ground upon which the court may rest its judgment, that course will be adopted and the constitutional question will be left for consideration until a case arises in which a decision upon such question will be unavoidable." In other words, a court will always avoid a constitutional question, if possible. In the present case, that course of action was not only possible but absolutely imperative. If appellant's motion for withdrawal had been opposed by the appellee, there might be some reasons for its denial, in view of section 4 of Rule 52 which provides that after the filing of appellee's brief, "the withdrawal may be allowed by the court in its discretion." At any rate, this discretion should always be exercised in favor of a withdrawal where a constitutional question will thereby be avoided.

In this connection, let us describe the proceedings (called "arbitrary and illegal" by Mr. Justice Tuason) that led to teh denial of the motion for withdrawal. During the deliberation in which all the eleven members were present, seven voted to allow and four to deny. Subsequently, without any previous notice and when Mr. Justice Hontiveros was absent, the matter was again submitted to a vote, and one Justice (who previously was in favor of the withdrawal) reversed his stand, with the result that the votes were five to five. This result was officially released and the motion denied under the technicality provided in Rule of Court No. 56, section 2. It is very interesting to observe that Mr. Justice Hontiveros, who was still a member of the Court and could have attended the later deliberation, if notified and requested, previously voted for the granting of the motion. The real explanation for excluding Mr. Justice Hontiveros, against my objection, and for the reversal of the vote of one Justice who originally was in favor of the withdrawal is found in the confession made in the majority

opinion to the effect that the circular of the Department of Justice instructing all registers of deeds to accept for registration transfers of residential lots to aliens, was an "interference with the regular and complete exercise by this Court of its constitutional functions," and that "if we grant the withdrawal, the result is that petitioner-appellant Alexander A. Krivenko wins his case, not by a decision of this Court, but by the decision or circular of the Department of Justice issued while this case was pending before this Court." The zealousness thus shown in denying the motion for wuthdrawal is open to question. The denial of course is another way of assuming that the petitioner-appellant and the Solicitor General had connived with the Department of Justice in a scheme not only to interfere with the functions of this Court but to dispose of the national patrimony in favor of aliens.

In the absence of any injunction from this Court, we should recognize tha right of the Department of Justice to issue any circular it may deem legal and proper on any subject, and the corollary right of the appellant to take advantage thereof. What is most regrettable is the implication that the Department of Justice, as a part of the Executive Department, cannot be as patriotic and able as this Court in defending the Constitution. If the circular in question is objectionable, the same can be said of the opinion of the Secretary of Justice in 1945 in effect prohibiting the registration of transfers of private residential lots in favor of aliens, notwithstanding the pendency in this Court of the case of Oh Cho vs. Director of Lands (43 Off. Gaz., 866), wherin according to the appellant, the only question raised was whether, or not "an alien can acquire a residential lot and register it in his name," and notwithstanding the fact that in said case the appealed decision was in favor of the alien applicant and that, as hereinbefore stated, the Court of Appeals in another case (CA-G.R. No. 29) had renderd in 1943 a decision holding that private residential lots are not included in the prohibition in section 5 of Article XIII of the Constitution. And yet this Court, failing to consider said opinion as an "interference," chose to evade the only issue raised by the appellant and squarely met by the appellee in the Oh Cho case which already required a decision on the constitutional question resolved in the case at bar against, so to say, the will of the parties litigant. In other words, the majority did not allow the withdrawal of the present appeal not so much as to dispose of it on the merits, but to annul the circular of the Department of Justice which is, needless to say, not involved in this case. I cannot accept the shallow excuse of the majority that the denial of the motion for withdrawal was promted by the fear that "our indifference of today might signify a permanent offense to the Constitution," because it carries the rather immodest implication that this Court has a monopoly of the virtue of upholding and enforcing, or supplying any deficiency in, the Constitution. Indeed, the fallacy of the impliation is made glaring when Senator Franscisco lost no time in introducing a bill that would clarify the constitutional provision in question in the sense desired by the majority. Upon the other hand, the majority should not worry about the remoteness of the opportunity that will enable this Court to pass upon this constitutional question, because we can take advance notice of the fact that in Rellosa vs. Gaw Chee Hun (49 Off. Gaz., 4345), in which the parties have already presented. But even disregarding said case, I am sure that, in view of the recent newspaper discussion which naturally reached the length and breadth of the country, there will be those who will dispute their sales of residential lots in favor of aliens and invoke the constitutional prohibition.

BENGZON, J., dissenting:

It is unnecessary to deliver at this time any opinion about the extent of the constitutional prohibition. Both parties having agreed to writer finis to the litigation, there is no obligation to hold forth on the issue. It is not our mission to give advice to other person who might be interested to give advice to other persons who might be interested to know the validity or invalidity of their sales or purchases. That is the work of lawyers and juriscounsults.

There is much to what Mr. Justice Padilla explains regarding any eagerness to solve the constitutional problem. It must be remembered that the other departments of the Government are not prevented from passing on constitutional question arising in the exercise of their official powers. (Cooley, Constitutional Limitations, 8th ed., p. 101.) This Tribunal was not established, nor is it expected to play the role of an overseer to supervise the other Government departments, with the obligation to seize any opportunity to correct what we may believe to be erroneous application of the constitutional mandate. I cannot agree to the suggestion that the way the incumbent Secretary of Justice has interpreted the fundamental law, no case will ever arise before the court, because the registers of deeds under his command, will transfer on thier books all sales to aliens. It is easy to perceive several probabilities: (1) a new secretary may entertain opposite views; (2) parties legally affected — like heirs or or creditors of the seller — may wish to avoid the conveyance to aliens, invoking the

constitutional inhibition. Then, in a truly contested case, with opposing litigants actively arguing their sides we shall be in a position to do full justice. It is not enough that briefs — as in this case — have been filed; it is desirable, perhaps essential, to make sure that in a motion for reconsideration, or in a re-hearing in case of tie, our attention shall be invited to points inadequately touched or improperly considered.

It is stated that sales to aliens of residential lots are currently being effected. No matter. Those sales will be subject to the final decision we shall reach in a properly submitted litigation. To spell necessity out of the existence of such conveyances, might amount to begging the issue with the assumption that such transfers are obviously barred by the Organic Law. And yet sales to foreigners of residential lots have taken place since our Constitution was approved in 1935, and no one questioned their validity in Court until nine years later in 1945, after the Japanese authorities had shown distaste for such transfers.

The Court should have, I submit, ample time to discuss this all-important point, and reflect upon the conflicting politico-economic philosophies of those who advocate national isolation against international cooperation, and vice-versa. We could also delve into several aspects necessarily involved, to wit:

(a) Whether the prohibition in the Constitution operated to curtail the freedom to dispose oflandowners at the time of its adoption; or whether it merely affected the rights of those who should become landowners after the approval of the Constitution;7

(b) What consequences would a ruling adverse to aliens have upon our position and commitments in the United Nations Organization, and upon our treaty-making negotiations with other nations of the worlds; and

(c) When in 1941 Krivenko acquired this land he was a Russian citizen. Under the treaties between the United States and Russia, were Russian nationals allowed to acquire residential lots in places under the jurisdiction of the United States? If so, did our Constitution have the effect of modifying such treaty during the existence of the Commonwealth Government?

The foregoing view and doubts induced me to vote for dismissal of the appeal as requested by the parties, and for withholding of any ruling on the constitutional prohibition. However, I am now ready to cast my vote. I am convinced that the organic law bans the sales of agricultural lands as they are popularly understood — not including residential, commercial, industrial or urban lots. This belief is founded on the reasons ably expounded by Mr. Justice Paras, Mr. Justice Padilla and Mr. Justice Tuason. I am particularly moved by the consideration that a restricted interpretation of the prohibition, if erroneous or contrary to the poeple's desire, may be remedied by legislation amplifying it; whereas a liberal and wide application, if erroneous, would need the cumbersome and highly expensive process of a constitutional amendment.

PADILLA, J., dissenting:

The question submitted for decision is whether a parcel of land of private ownership suitable or intended for residence may be alienated or sold to an alien.

Section 5, Article XIII, of the Constitution provides:

Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

The majority holds that a parcel of land of privateownership suitable or intended or used for residence is included in the term "private agricultural land" and comes within the prohibition of the Constitution. In support of the opinion that lands of private ownership suitable for residence are included in the term "private agricultural land" and cannot be alienated or sold to aliens, the majority invokes the decision of this Court in Mapa vs. Insular Government (10 Phil., 175), which holds that urban lands of the public domain are included in the term "public agricultural land." But the opinion of the majority overlooks the fact that the inclusion by this Court of public lands suitable for residence in the term "public agricultural land" was due to the classification made by the Congress of the United States in the Act of 1 July 1902, commonly known as the Philippine Bill. In said Act, lands of the public domain were classified into agricultural, timber and mineral. The only

alienable or disposable lands of the public domain were those belonging to the first class. Hence a parcel of land of the public domain suitable for residence, which was neither timber nor mineral, could not be disposed of or alienated unless classified as public agricultural land. The susceptibility of a residential lot of the public domain of being cultivated is not the real reason for the inclusion of such lot in the classification of public agricultural land, for there are lands, such as foreshore lands, which would hardly be susceptible of cultivation (Ibañez de Aldecoa vs. Insular Government, 13 Phil., 159, 167-168), and yet the same come under the classification of public agricultural land. The fact, therefore, that parcels of land of the public domain suitable for residence are included in the classification of public agricultural land, is not a safe guide or index of what the framers of the Constitution intended to mean by the term "private agricultural land." It is contrary to the rules of statutory construction to attach technical meaning to terms or phrases that have a common or ordinary meaning as understood by he average citizen.

At the time of the adoption of the Constitution (8 February 1935), the Public Land Act in force was Act No. 2874. Under this Act, only citizens of the Philippine Islands or of the United States and corporations or associations described in section 23 thereof, and citizens of countries the laws of which grant to citizens of the Philippine Islands the same right to acquire the public land as to their own citizens, could acquire by purchase agricultural land of the public domain (section 23, Act No. 2874). This was the general rule. There was an exception. Section 24of the Act provides:

No person, corporation, association or partnership other than those mentioned in the last preceding section may acquire or own agricultural public land or land of any other denomination or classification, not used for industrial or residence purposes, that is at the time or was originally, really or presumptively, of the public domain, or any permanent improvement thereon, or any real right on such land and improvement: Provided, however, That persons, corporations, associations, or partnerships which at the date upon which this Act shall take effect, hold agricultural public lands or land of any other denomination not used for industrial or residence purposes, that belonged originally, really or presumptively, to the public domain, or permanent improvements on such lands, or a real right upon such lands and improvements, having acquired the same under the laws and regulations in force at the date of such acquisition, shall be authorized to continue holding the same as if such persons, corporations, associations, or partnerships were qualified under the last preceding section; but they shall not encumber, convey, or alienate the same to persons, corporations, associations or partnerships not included in section twenty-three of this Act, except by reason of hereditary succession, duly legalized and acknowledged by competent Courts. (Emphasis supplied.)

Section 57 of the Act, dealing with lands of the public domain suitable for residential, commercial, industrial, or other productive purposes other than agricultural, provides:

Any tract of land comprised under this title may be leased or sold, as the case may be, to any person, corporation, or association authorized to purchase or lease public lands for agricultural purposes. . . .  Provided further, That any person, corporation, association, or partnership disqualified from purchasing public land for agricultural purposes under the provisions of this Act, may purchase or lease land included under this title suitable for industrial or residence purposes, but the title or lease granted shall only be valid while such land issued for the purposes referred to. (Emphasis supplied.)

Section 121 of the Act provides:

No land originally acquired in any manner under the provisions of the former Public Land Act or of any other Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippine Islands with regard to public lands, terrenos baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain, or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations, or associations who may acquire land of the public domain under this Act; . . .  Provided, however, That this prohibition shall not be applicable to the conveyance or acquisition by reason of hereditary succession duly acknowledged and legalized by competent Courts, nor to lands and improvements acquired or held for industrial or residence purposes, while used for such purposes: . . . (Emphasis supplied.)

Under and pursuant to the above quoted provisions of Act No. 2874, lands of the public domain, that were neither timber nor mineral, held for industrial or residence purposes, could be acquired by aliens disqualified from acquiring by purchase or lease public agricultural lands (sections 24, 57, 121, Act No. 2874). The delegates to the Constituent Assembly were familiar with the provisions of the Public Land Act referred to. The prohibition to alienate public agricultural lands to disqualified persons, corporations or associations did not apply to "lands and improvements acquired or held for industrial or residence purposes, while used for such purposes." Even under the provisions of Act No. 926, the first Public Land Act, lots for townsites could be acquired by any person irrespective of citizenship, pursuant to section 47 of the said Act. In spite of the nationalistic spirit that pervades all the provisions of Act No. 2874, the Philippine Legislature did not deem it necessary to exclude aliens from acquiring and owning lands of the public domain suitable for industrial or residence purposes. It adopted the policy of excluding aliens from acquiring agricultural lands of the public domain not "suitable for residential, commercial, industrial, or other productive purposes," which, together with timber, mineral and private agricultural lands, constitute the mainstay of the nation. Act No. 2874 was in force for nearly sixteen years — from 1919 to 1935. There is nothing recorded in the journals of proceedings of the Constituent Assembly regarding the matter which would have justified a departure from the policy theretofore adopted.

If under the law in force at the time of the adoption of the Constitution, aliens could acquire by purchase or lease lands of the public domain, that were neither timber nor mineral, held for industrial or residence purposes, how can it be presumed that the framers of the Constitution intended to exclude such aliens from acquiring by purchase private lands suitable for industrial or residence purposes? If pursuant to the law in force at the time of the adoption of the Constitution, lands of the public domain and improvements thereon acquired or held for industrial or residence purposes were not included in the prohibition found in section 121 of ActNo. 2874, there is every reason for believing that the framers of the Constitution, who were familiar with the law then in force, did not have the intention of applying the prohibition contained in section 5, Article XIII, of the Constitution to lands of private ownership suitable or intended or used for residence, there being nothing recorded in the journals of proceedings of the Constituent Assembly regarding the matter which, as above stated, would have justified a departure from the policy then existing. If the term "private agricultural land" comprehends lands of private ownership suitable or intended or used for residence, as held by the majority, there was no need of implementing a self-executory prohibition found in the Constitution. The prohibition to alienate such lands found in section 123 of Commonwealth Act No. 141 is a clear indication and proof that section 5, Article XIII, of the Constitution does not apply to lands of private ownership suitable or intended or used for residence. The term "private agricultural land" means privately owned lands devoted to cultivation, to the raising of agricultural products, and does not include urban lands of private ownership suitable for industrial or residence purposes. The use of the adjective "agricultural" has the effect of excluding all other private lands that are not agricultural. Timber and mineral ands are not, however, included among the excluded, because these lands could not and can never become private lands. From the land grants known as caballerias and peonias under the Laws of Indies down to those under the Royal Decrees of 25 June 1880 and 13 February 1894, the Philippine Bill, Act No. 926, the Jones Law, Act No. 2874, the Constitution, and Commonwealth Act No. 141, timber and mineral lands have always been excluded from alienation. The repeal by sections 23, 60, 123 of Commonwealth Act No. 141 of the exception provided for in sections 24, 57, 121 of Act No. 2874, did not change the meaning of the term "private agricultural land," as intended by the framers of the Constitution and understood by the people that adopted it.

The next question is whether the court below was justified under the in confirming the refusal of the Register of Deeds of Manila to record the sale of the private land for residence purposes to the appellant who is an alien.

There is no evidence to show the kind of land, the deed of sale of which is sought to be recorded by the appellant — whether it is one of those described in section 123 of Commonwealth Act No. 141; or a private land that had never been a part of the public domain (Carino vs. Insular Government, 212 U.S., 449; Oh Cho vs. Director of Lands, 43 Off. Gaz., 866). If it is the latter, the prohibition of section 123 of Commonwealth Act No. 141 does not apply. If it is the former, section 123 of Commonwealth Act No. 141, which providesthat —

No land originally acquired in any manner under the provisions of any previous Act, ordinance, royal order, royal decree, or any other provision of law formerly in force in the Philippines with regard to public lands, terrenos

baldios y realengos, or lands of any other denomination that were actually or presumptively of the public domain, or by royal grant or in any other form, nor any permanent improvement on such land, shall be encumbered, alienated, or conveyed, except to persons, corporations or associations who may acquire land of the public domain under this Act or to corporate bodies organized in the Philippines whose charters authorize them to do so: . . .

is similar in nature to section 121 of Act No. 2874. This Court held the last mentioned section unconstitutional, for it violates section 3 of the Act of Congress of 29 August 1916, commonly known as the Jones Law (Central Capiz vs. Ramirez, 40 Phil., 883). Section 123 of Commonwealth Act No. 141, following the rule laid down in the aforecited case, must also be declared unconstitutional, for it violates section 21 (1), Article VI, of the Constitution, which is exactly the same as the one infringed upon by section 121 of Act No. 2874. This does not mean that a law may not be passed by Congress to prohibit alienation to foreigners of urban lands of private ownership; but in so doing, it must avoid offending against the constitutional provision referred to above.

Before closing, I cannot help but comment on the action taken by the Court in considering the merits of the case, despite the withdrawal of the appeal by the appellants, consented to by the appellee. If discretion was to be exercised, this Court did not exercise it wisely. Courts of last resort generally avoid passing upon constitutional questions if the case where such questions are raised may be decided on other grounds. Courts of last resort do not express their opinion on a consitutional question except when it is the very lis mota (Yangcovs. Board of Public Utility Commissioners, 36 Phil., 116, 120; Co Chiong vs. Dinglasan, p. 122,ante). Moreover, the interpretation of the provisions of the Constitution is no exclusive of the courts. The other coordinate branches of the government may interpret such provisions acting on matters coming within their jurisdiction. And although such interpretation is only persuasive and not binding upon the courts, nevertheless they cannot be deprived of such power. Of course, the final say on what is the correct interpretation of a constitutional provision must come from and be made by this Court in an appropriate action submitted to it for decision. The correct interpretation of a constitutional provision is that which gives effect to the intent of its framers and primarily to the understanding of such provision by the poeple that adopted it. This Court is only an interpreter of the instrument which embodies what its framers had in mind and especially what the people understood it to be when they adopted it. The eagerness of this Court to express its opinion on the constitutional provision involved in this case, notwithstanding of the withdrawal of the appeal, is unusualf or a Court of last resort. It seems as if it were afraid to be deprived by the other coordinate branches of the government of its prerogative to pass upon the constitutional question herein involved. If all the members of the Court were unanimous in the interpretation of the constitutional provision under scrutiny, that eagerness might be justified, but when some members of the Court do not agree to the interpretation placed upon such provision, that eagerness becomes recklessness. The interpretation thus placed by the majority of the Court upon the constitutional provision referred to will be binding upon the other coordinate branches of the government. If, in the course of time, such opinion should turn out to be erroneous and against the welfare of the country,an amendment to the Constitution — a costly process — would have to be proposed and adopted. But, if the Court had granted the motion for the withdrawal of the appeal, it would not have to express its opinion upon the constitutional provision in question. It would let the other coordinate branches of the Government act according to their wisdom, foresight and patriotism. They, too, possess those qualities and virtues. These are not of the exclusive possession of the members of this Court. The end sought to be accomplished by the decision of this Court may be carried out by the enactment of a law. And if the law should turn out to be against the well-being of the people, its amendment or repeal would not be as costly a process as a constitutional amendment.

In view of the denial by this Court of the motion to dismiss the appeal, as prayed for by the appellant and consented to by the appellee, I am constrained to record my opinion, that, for the reasons hereinbefore set forth, the judgment under review should be reversed.

TUASON, J., dissenting:

The decision concludes with the assertion that there is no choice. "We are construing" it says, "the Constitution as we see it and not as we may wish it to be. If this is the solemn mandate of the Constitution, we cannot compromise it even in the name of equity." We wish deep in our heart that we were given the light to see as the majority do and could share their

opinion. As it is, we perceive things the other way around. As we see it, the decision by-passed what according to our humble understanding is the plain intent of the Constitution and groped out of its way in search of the ideal result. The denial by this Court of the motion to withdraw the appeal to which the Solicitor General gave his conformity collides with the professed sorrow that the decision cannot be helped.

Section 5, Article XIII, of the Constitution reads:

5. Save in cases of hereditary succession, no private agricultural land shall be transferred or assigned except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

The sole and simple question at issue is, what is the meaning of the term "agricultural land" as used in this section? Before answering the question, it is convenient to refresh our memory of the pertinent rule in the interpretation of constitutions as expounded in decisions of courts of last resort and by law authors.

It is a cardinal rule in the interpretation of constitutions that the instrument must be a construed so to give effect to the intention of the people who adopted it. This intention is to be sought in the constitution itself, and the apparent meaning of the words employed is to be taken as expressing it, except in cases where the assumption would lead to absurdity, ambiguity, or contradiction. Black on Interpretation of Laws, 2nd ed., p. 20.)

Every word employed in the constitution is to be expounded in its plain, obvious, and common sense, unless the context furnishes some ground to control, qualify, or enlarge it. Constitutions are not designed for metaphysical or logical subtleties, for niceties of expression, for critical propriety, for elaborate shades of meaning, or for the exercise of philosophical acuteness or judicial research. They are instruments of a practical nature founded on the common business of human life adapted to common wants, designed for common use, and fitted for common understandings. The people make them, the people adopt them, the people must be supposed to read them with the help of common sense, and cannot be presumed to admit in them any recondite meaningor any extraordinary gloss. (1 Story, Const. sec. 451.)

Marshall , Ch. J., says:

The framers of the Constitution, and the people who adopted it, "must be understood to have employed words in their natural sense, and to have intended what they have said." (Gibbons vs. Ogdon, 9 Wheat, 1, 188; 6 Law. ed., 23).

Questions as to the wisdom, expediency, or justice of constitutional provisions afford no basis for construction where the intent to adopt such provisions is expressed in clear and unmistakable terms. Nor can construction read into the provisions of a constitution some unexpressed general policy or spirit, supposed to underline and pervade the instrument and to render it consonant to the genius of the institutions of the state. The courts are not at liberty to declare an act void because they deem it opposed to the spirit of the Constitution. (12 C.J., 702-703.)

There is no obscurity or ambiguity in the section of the Constitution above quoted, nor does a literal interpretation of the words "agricultural land" lead to any un-the majority opinion, the phrase has no technical meaning, and the same could not have been used in any sense other than that in which it is understood by the men in the street.

That there are lands of private ownership will not be denied, inspite of the fiction tha all lands proceed from the sovereign. And, that lands of private ownership are known as agricultural, residential, commercial and industrial, is another truth which no one can successfully dispute. In prohibiting the alienation of private agricultural land to aliens, the Constitution, by necessary implication, authorizes the alienation of other kinds of private property. The express mention of one thing excludes all others of the same kind.

Let us then ascertain the meaning of the word "agricultural" so that by process of elimination we can see what lands do not fall within the purview of the constitutional inhibition. Webster's New international Dictionary defines this word as "of or pertaining to agriculture connected with, or engaged in, tillage; as, the agricultural class; agricultural implements, wages, etc." According to this definition and according to the popular conception of the word, lands in cities and towns intended or

used for buildings or other kinds of structure are never understood to mean agricultural lands. They are either residential, commercial, or industrial lands. In all city plannings, communities are divided into residential, commercial and industrial sections. It would be extremely out of the ordinary, not to say ridiculous, to imagine that the Constitutional Convention considered a lot on the Escolta with its improvement as agricultural land.

If extrinsic evidence is needed, a reference to the history of the constitutional provision under consideration will dispel all doubts that urban lands were in the minds of the framers of the Constitution as properties that may be assigned to foreigners.

Dean Aruego, himself a member of the Constitutional Convention, is authority for the statement that the committee on nationalization and preservation of lands and other natural resources in its report recommended the incorporation into the Constitution of the following provision:

SEC. 4. Save in cases of hereditary succession, no land of private ownership shall be transferred or assigned by the owner thereof except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippine Islands; and the Government shall regulate the transfer or assignment of land now owned by persons, or corporations,or associations not qualified under the provisions of this Constitution to acquire or hold lands in the Philippine Islands.

In Article XIII, entitled "General Provisions," of the first draft of the Constitution, the sub-committee of seven embodied the following provision which had been recommended in the reports of the committee on agricultural development, national defense, industry, and nationalization and preservation of lands and other natural resources:

SEC. 16. Save in cases of hereditary succession, no land of private ownership shall be transferred or assigned by the owner thereof except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain in the Philippines.

But on January 22, 1935, the sub-committee of seven submitted to the Convention a revised draft of the articleo n General Provisions of the first draft, which revised draft had been prepared by the committee in consultation with President Quezon. The revised draft as it touches private lands provides as follows:

Save in cases of hereditary succession, no agricultural land of private ownership shall be transferred or assigned by the owner thereof except to individuals, corporations, or associations qualified to acquire or hold lands, of the public domain in the Philippine Islands. (2 The Framing of the Philippine Constitution, Aruego, 595-599.)

The last-quoted proposal became section 5 of Article XIII of the Constitution in its final form with sligh alteration in the phraseology.

It will thus be seen that two committees in their reports and the sub-committee of seven in its first draft of the Constitution all proposed to prescribe the transfer to non-Filipino citizens of any land of private ownership without regard to its nature or use, but that the last mentioned sub-committee later amended that proposal by putting the word "agricultural" before the word "land." What are we to conclude from this modification? Its self-evident purpose was to confine the prohibition to agricultural lands, allowing the ownership by foreigners of private lands that do not partake of agricultural character. The insertion of the word "agricultural" was studied and deliberated, thereby eliminating any possibility that its implication was not comprehended.

In the following paragraphs we shall, in our inadequate way, attempt to show that the conclusions in this Court's decision are erroneous either because the premises are wrong or because the conclusions do not follow the premises.

According to the decision, the insertion of the word "agricultural" was not intended to change the scope of the provision. It says that "the wording of the first draft was amended for no other purpose than to clarify concepts and avoid uncertainties."

If this was the intention of the Constitutional Assembly, that could not have devised a better way of messing up and obscuring the meaning of the provision than what it did. If the purpose was "to clarify concepts and avoid uncertainties," the insertion of the word "agricultural" before the word "land" produced the exact opposite of the result which the change was

expected to accomplish — as witness the present sharp and bitter controversy which would not have arisen had they let well enough alone.

But the assumption is untenable. To brush aside the introduction of the word "agricultural" into the final draft as "merely one of words" is utterly unsupported by evidence, by the text of the Constitution, or by sound principles of construction. There is absolutely no warrant or the statement that the Constitutional Convention, which was guided by wise men, men of ability and experience in different fields of endeavor, used the termafter mature deliberation and reflection and after consultation with the President, without intending to give it its natural signification and connotation. "We are not at liberty to presume that the framers of the Constitution, or the people who adopted it, did not understand the force of language." (Peoplevs. Rathbone, 32 N.Y.S., 108.) The Constitution will be scanned in vain for any reasonable indication that its authors made the change with intention that it should not operate according to the rules of grammar and the ordinary process of drawing logical inferences. The theory is against the presumption, based on human experience, that the framers of a constitution "have expressed themselves in careful and measured terms, corresponding with the immense importance of the powers delegated, leaving as little as possible to implication." (1 Cooley's Constitutional Limitations, 8th ed., 128, 129.) "As men, whose intention require no concealment, generally employ the words which most directly and aptly express the ideas they intend to convey, the enlightened patriots who framed our constitution, and the people who adopted it, must be understood to have employed words in their natural sense and to have intended what they have said." (Gibbons vs. Ogden, ante.)

When instead of prohibiting the acquisition of private land of any kind by foreigners, as originally proposed, the prohibition was changed to private agricultural lands, the average man's faculty of reasoning tells him that other lands may be acquired. The elementary rules of speech with which men of average intelligence, and, above all, the members of the Constitutional Assembly were familiar, inform us that the object of a descriptive adjective is to specify a thing as distinct from another. It is from this process of reasoning that the maxim expressio unius est exclusio alterius stems; a familiar rule of interpretation often quoted, and admitted as agreeable to natural reason.

If then a foreigner may acquire private lands that are not agricultural, what lands are they? Timber land or mineral land, or both? As the decision itself says these lands are not susceptible of private ownership, the answer can only be residential, commercial, industrial or other lands that are not agricultural. Whether a property is more suitable and profitable to the owners as residential, commercial or industrial than if he devotes it to the cultivation of crops is a matter that has to be decided according to the value of the property, its size, and other attending circumstances.

The main burden of this Court's argument is that, as lands of the public domain which are suitable for home building are considered agricultural land, the Constitution intended that private residential, commercial or industrial lands should be considered also agricultural lands. The Court says that "what the members of the Constitutional Convention had in mind when they drafted the Constitution was this well-known classification (timber, mineral and agricultural) and its technical meaning then prevailing."

As far as private lands are concerned, there is no factual or legal basis for this assumption. The classification of public lands was used for one purpose not contemplated in the classification of private lands. At the outset, it should be distinctively made clear that it was this Court's previous decisions and not an Act of Congress which declared that public lands which were not forest or mineral were agricultural lands. Little reflection on the background of this Court's decisions and the nature of the question presented in relation to the peculia rprovisions of the enactments which came up for construction, will bring into relief the error of applying to private lands the classification of public lands.

In the first place, we cannot classify private lands in the same manner as public lands for the very simple and manifest reason that only lands pertaining to one of the three groups of public lands — agricultural — can find their way into the hands of private persons. Forest lands and mineral lands are preserved by the State for itself and for posterity. Granting what is possible, that there are here and there forest lands and mineral lands to which private persons have obtained patents or titles, it would be pointless to suppose that such properties are the ones which section 5 of Article XIII of the Constitution wants to distinguish from private agricultural lands as lienable. The majority themselves will not admit that the Constitution which forbids the alienation or private agricultural lands allows the conveyance of private forests and mines.

In the second place, public lands are classified under special conditions and with a different object in view. Classification of public lands was and is made for purposes of administration; for the purpose principally of segregating lands that may be sold from lands that should be conserved. The Act of July 1, 1902, of the United States Congress designated what lands of the public domain might be alienated and what should be kept by the State. Public lands are divided into three classes to the end that natural resources may be used without waste. Subject to some exceptions and limitation, agricultural lands may be disposed of by the Government. Preservation of forest and mineral lands was and is a dominant preoccupation. These are important parts of the country's natural resources. Private non-agricultural land does not come within the category of natural resources. Natural resources are defined in Webster's Standard Dictionary as materials supplied or produced by nature. The United States Congress evinced very little if any concern with private lands.

It should also be distinctively kept in mind that the Act of Congress of the United States above mentioned was an organic law and dealt with vast tracts of untouched public lands. It was enacted by a Congress whose members were not closely familiar with local conditions affecting lands. Under the circumstances, it was natural that the Congress employed "words in a comprehensive sense as expressive of general ideas rather than of finer shades of thought or of narrow distinctions. "The United States Congress was content with laying down a broad outline governing the administration, exploitation, and disposition of the public wealth, leaving the details to be worked out by the local authorities and courts entrusted with the enforcement and interpretation of the law.

It was a result of this broad classification that questions crept for a definition of the status of scattered small parcels of public lands that were neither forest, mineral, nor agricultural, and with which the Congress had not bothered itself to mention separately or specifically. This Court, forced by nature of its duty to decide legal controversies, ruled that public lands that were fit for residential purposes, public swamps and other public lands that were neither forest nor mineral, were to be regarded as agricultural lands. In other words, there was an apparent void, often inevitable in a law or constitution, and this Court merely filled that void. It should be noted that this Court did not say that agricultural lands and residential lands are the same or alike in their character and use. It merely said that for the purpose of judging their alienability, residential, commercial or industrial lands should be brought under the class of agricultural lands.

On the other hand, section 5 of Article XIII of the Constitution treats of private lands with a different aim. This Court is not now confronted with any problem for which there is no specific provision, such as faced it when the question of determining the character of public residential land came up for decision. This Court is not called to rule whether a private residential land is forest, mineral or agricultural. This Court is not, in regard to private lands, in the position where it found itself with reference to public lands, compelled by the limited field of its choice for a name to call public residential lands, agricultural lands. When it comes to determining the character of private non-agricultural lands, the Court's task is not to compare it with forests, mines and agricultural lands, to see which of these bears the closest resembrance to the land in question. Since there are no private timber nor mineral lands, and if there were, they could not be transferred to foreigners, and since the object of section 5 of Article XIII of the Constitution is radically at variance withthat of the laws covering public lands, we have to have different standards of comparison and have to look of the intent of this constitutional provision from a different angle and perspective. When a private non-agricultural land demands to know where it stands, we do not acquire, is it mineral, forest or agricultural? We only ask, is it agricultural? To ascertain whether it is within the inhibition of section 5 of Article XIII.

The last question in turn resolves itself into what is understood by agricultural land. Stripped of the special considerations which dictated the classification of public lands into three general groups, there is no alternative but to take the term "agricultural land" in its natural and popular signification; and thus regarded, it imports a distinct connotation which involves no absurdity and no contradiction between different parts of the organic law. Its meaning is that agricultural land is specified in section 5 of Article XIII to differentiate it from lands that are used or are more suitable for purposes other than agriculture.

It would profit us to take notice of the admonition of two of the most revered writers on constitutional law, Justice Story and Professor Cooley:

"As a general thing, it is to be supposed that the same word is used in the same sense wherever it occurs in a constitution. Here again, however, great caution must be observed in applying an arbitrary rule; for, as Mr. Justice Story has well observed; `It does not follow, either logically or grammatically, that because a word is found in one connection in the Constitution with a definite sense, therefore the same is to be adopted in every other connection in which it occurs. This would be to suppose that the framers weighed only the force of single words, as philologists or critics, and not whole clauses and objects, as statesmen and practical reasoners. And yet nothing has been more common than to subject the Constitution to this narrow and mischievous criticism. Men of ingenious and subtle minds, who seek for symmetry and harmony in language, having found in the Constitution a word used in some sense which falls in with their favorite theory of interpreting it, have made that the standard by which to measure its use in every other part of the instrument. They have thus stretched it, as it were, on the bed of Procrustes, lopping off its meaning when it seemed too large for their purposes, and extending it, when it seemed too short. They have thus distorted it to the most unnatural shapes, and crippled where they have sought only to adjust its proportions according to their own opinions? And he gives many instances where, in the National Constitution, it is very manifest the same word is employed in different meanings. So that, while the rule may be sound as one of presumption merely, its force is but slight, and it must readily give way to a different intent appearing in the instrument." (1 Cooley's Constitutional Limitations, 8th ed., 135.)

As to the proposition that the words "agricultural lands" have been given a technical meaning and that the Constitution has employed them in that sense, it can only be accepted in reference to public lands. If a technical import has been affixed to the term, it can not be extended to private lands if we are not to be led to an absurdity and if we are avoid the charge that we are resorting to subtle and ingenious refinement to force from the Constitution a meaning which its framers never held. While in the construction of a constitution words must be given the technical meaning which they have acquired, the rule is limited to the "well-understood meaning" "which the people must be supposed to have had in view in adopting them." To give an example. "When the constitution speaks of an ex post factolaw, it means a law technically known by that designation; the meaning of the phrase having become definite in the history of constitutional law, and being  so familiar to the people that it is not necessary to employ language of a more popular character to designate it ." In reality, this is not a departure from the general rule that the language used is to be taken in the sense it conveys to the popular mind, "for the technical sense in these cases is the sense popularly understood, because that is the sense fixed upon the words in legal and constitutional history where they have been employed for the protection of popular rights." (1 Cooley's Constitutional Limitations, 8th ed., 132-133.) Viewed from this angle, "agricultural land" does not possess the quality of a technical term. Even as applied to public lands, and even among lawyers and judges, how many are familiar with the decisions of this Court which hold that public swamps and public lands more appropriate for buildings and other structures than for agriculture are agricultural lands? The same can be truthfully said of members of the Constitutional Assembly.

The speeches of delegates Montilla and Ledesma cannot serve as a means of interpretation. The sentiments expressed in those speeches, like the first drafts of section 5 of Article XIII, may have reflected the sentiments of the Convention in the first stages of the deliberation or down to its close. If they were, those sentiments were relaxed and not given full sway for reasons on which we need not speculate. Speeches in support of a project can be a valuable criterion for judging the intention of a law or constitution only if no changes were afterward affected. If anything, the change in section 5 of Article XIII wrought in the face of a strong advocacy for complete and absolute nationalization of all lands, without exception, offers itself as the best proof that to the framers of the Constitution the change was not "merely one of words" but represented something real and substantial. Firm and resolute convictions are expressed in a document in strong, unequivocal and unqualified language. This is specially true when the instrument is a constitution, "the most solemn and deliberate of human writings, always carefully drawn, and calculated for permanent endurance."

The decision quotes from the Framing of the Constitution by Dean Aruego a sentence which says that one of the principles underlying the provision of Article XIII of the Constitution is "that lands, minerals, forests and other natural resources constitute the exclusive heritage of the Filipino Nation." In underlying the word lands the Court wants to insinuate that all lands without exceptions are included. This is nothing to be enthusiastic over. It is hyperbole, "a figure of speech in which the statement expresses more than the truth" but "is accepted as a legal form of expression." It is an expression that "lies but does not deceive." When we say men must fight we do not mean all men, and every one knows we don't.

The decision says:

It is true that in section 9 of said Commonwealth Act No. 141,"alienable or disposable public lands" which are the same as "public agricultural lands" under the Constitution, are classified into agricultural, residential, commercial, industrial and for other purposes. This simply means that the term "public agricultural lands" has both a broad and a particular meaning. Under its broad or general meaning, as used in the Constitution, it embraces all lands that are neither timber nor mineral. This broad meaning is particularized in section 9 of Commonwealth Act No. 141 which classifies "public agricultural lands" for purposes of alienation or disposition, into lands that are strictly agricultural or actually devoted to cultivation for agricultural purposes; lands that are residential; commercial; industrial; or lands for other purposes. The fact that these lands are made alienable or disposable under Commonwealth Act No. 141, in favor of Filipino Citizen, is a conclusive indication of their character as public agricultural lands under said statute and under the Constitution."

If I am not mistaken in my understanding of the line of reasoning in the foregoing passage, my humble opinion is that there is no logical connection between the premise and the conclusion. What to me seems clearly to emerge from it is that Commonwealth Act No. 141, so far from sustaining that Court's theory, actually pulls down its case which it has built upon the foundation of parallel classification of public and private lands into forest, mineral and agricultural lands, and the inexistence of such things as residential, industrial or commercial lands. It is to be noted that Act No. 141, section 9, classifies disposable lands into agricultural, industrial, residential, commercial, etc. And these are lands of the public domain.

The fact that the provisions regarding alienation of private lands happens to be included in Article XIII, which is entitled "Conservation and Utilization of Natural Resources," is no ground for treating public lands and private lands on the same footing. The inference should rather be the exact reverse. Agricultural lands, whether public or private, are natural resources. But residential, commercial, and industrial lands, as we have seen, are not natural resources either in the sense these words convey to the popular mind or as defined in the dictionary. This fact may have been one factor which prompted the elimination of private non-agricultural lands from the range of the prohibition, along with reasons, of foreign policy, economics and politics.

From the opinion of Secretary of Justice Jose A. Santos in 1939, the majority can not derive any comfort unless we cling to the serious argument that as public lands go so go private lands. In that opinion the question propounded was whether a piece of public land which was more profitable as a homesite might not be sold and considered as agricultural. The illustrious Secretary answered yes, which was correct. But the classification of private lands was not directly or indirectly involved. It is the opinion of the present Secretary of Justice that is to the point. If the construction placed by the law-officer of the government on a constitutional provision may properly be invoked, as the majority say but which I doubt, as representing the true intent of the instrument, this Court, if it is to be consistent, should adopt Secretary Ozaeta's view. If the Solicitor General's attitude as interested counsel for the government in a judicial action is — as the decision also suggests but which, I think, is still more incorrect both in theory and in practice — then this Court should have given heed to the motion for withdrawal of the present appeal, which had been concurred in by the Solicitor General in line presumably with the opinion of the head of his department.

The Court fears that "this constitutional purpose of conserving agricultural resources in the hands of Filipino citizens may easily be defeated by the Filipino citizens themselves who may alienate their agricultural lands in favor of aliens." It reasons that "it would certainly be futile to prohibit the alienation of public agricultural lands to aliens if, after all, they may be freely so alienated upon their becoming private agricultural lands in the hands of Filipino citizens." Sections122 and 123 of Act No. 141 should banish this fear. These sections, quoted and relied upon in the majority opinion, prevent private lands that have been acquired under any of the public land laws from falling into alien possession in fee simple. Without this law, the fear would be well-founded if we adopt the majority's theory, which we precisely reject, that agricultural and residential lands are synonymous, be they public or private. The fear would not materialize under our theory, that only lands which are not agricultural may be owned by persons other than FIlipino citizens.

Act No. 141, by the way, supplies the best argument against the majority's interpretation of section 5 of Article XIII. Prohibiting the acquisition by foreigners of any lands originally acquired in any manner under its provisions or under the provisions of any previous law, ordinace, royal order, royal decree, or any other law formerly enforced in the Philippines with regard to public lands, etc., it is a mute eloquent testimony that in the minds of the legislature, whose interpretation the majority correctly say should be looked to as authoritative, the Constitution did not carry such prohibition. For if the Constitution already barred the alienation of lands of any kind in favor of aliens, the provisions of sections 122 and 123 of Commonwealth Act No. 141 would have been superfluous.

The decision says that "if under Article XIV section 8, of the Constitution, an alien may not even operate a small jeepney for hire, it is certainly not hard to understand that neither is he allowed to own a piece of land." There is no similitude between owning a lot for a home or a factory or a store and operating a jeepney for hire. It is not the ownership of a jeepney that is forbidden; it is the use of it for public service that is not allowed. A foreigner is not barred from owning the costliest motor cars, steamships or airplanes in any number, for his private use or that of his friends and relatives. He can not use a jeepney for hire because the operation of public utilities is reserved to Filipino nationals, and the operation of a jeepney happens to be within this policy. The use of a jeepney for hire maybe insignificant in itself but it falls within a class of industry that performs a vital function in the country's economic life, closely associated with its advancing civilization, supplying needs so fundamental for communal living and for the development of the country's economy, that the government finds need of subjecting them to some measure of control and the Constitution deems it necessary to limit their operation by Filipino citizens. The importance of using a jeepney for hire cannot be sneered at or minimized just as a vote for public office by a single foreign citizen can not be looked at with a shrug of the shoulder on the theory that it would not cause a ripple in the political complexion or scene of the nation.

This Court quotes with approval from the Solicitor General's brief this passage: "If the term `private agricultural lands' is to be construed as not including residential lots or lands of similar nature, the result will be that aliens may freely acquire and possess not only residential lots and houses for themselves but entire subdivisions and whole towns and cities, and that they may validly buy and hold in their names lands of any area for building homes, factories, industrial plants, fisheries, hatcheries, schools, health and vacation resorts, markets, golf — courses, playgrounds, airfields and a host of other uses and purposes that are not, in appellant's words, strictly agricultural." Arguments like this have no place where there is no ambiguity in the constitution or law. The courts are not at liberty to disregard a provision that is clear and certain simply because its enforcement would work inconvenience or hardship or lead to what they believe pernicious results. Courts have nothing to do with inconvenience or consequences. This role is founded on sound principles of constitutional government and is so well known as to make citations of authorities presumptuous.

Granting the possibility or probability of the consequences which this Court and the Solicitor General dread, we should not overlook the fact that there is the Congress standing guard to curtail or stop such excesses or abuses if and when the menace should show its head. The fact that the Constitution has not prohibited, as we contend, the transfer of private non-agricultural lands to aliens does not prevent the Congress from passing legislation to regulate or prohibit such transfer, to define the size of private lands a foreigner may possess in fee simple, or to specify the uses for which lands may be dedicated, in order to prevent aliens from conducting fisheries, hatcheries, vacation resorts, markets, golf-courses, cemeteries. The Congress could, if it wants, go so far as to exclude foreigners from entering the country or settling here. If I may be permitted to guess, the alteration in the original draft of section 5 of Article XIII may have been prompted precisely by the thought that it is the better policy to leave to the political departments of the Government the regulation or absolute prohibition of all land ownership by foreigners, as the changed, changing and ever-changing conditions demand. The Commonwealth Legislature did that with respect to lands that were originally public lands, through Commonwealth Act No. 141, and the Legislative Assembly during the Japanese occupation extended the prohibition to all private lands, as Mr. Justice Paras has pointed out. In the present Congress, at least two bills have been introduced proposing Congressional legislation in the same direction. All of which is an infallible sign that the Constitution does not carry such prohibition, in the opinion of three legislatures, an opinion which, we entirely agree with the majority, should be given serious consideration by the courts (if needed there were any doubt), both as a matter of policy, and also because it may be presumed to represent the true intent of the instrument. (12 C.J., 714.) In truth, the decision lays special emphasis on the fact

that "many members of the National Assembly who approved the new Act (No. 141) had been members of the Constitutional Convention." May I add that Senator Francisco, who is the author of one of the bills I have referred to, in the Senate, was a leading, active and influential member of the Constitutional Convention?

G.R. No. 107427           January 25, 2000

JAMES R. BRACEWELL, petitioner, vs.HONORABLE COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.

YNARES-SANTIAGO, J.:

Before us is a petition to affirm the Order of the Regional Trial Court of Makati, Branch 58, in LRC Case No. M-77,1 which was reversed by respondent Court of Appeals in its Decision dated June 29, 1992 in CA-G.R. CV No. 26122. 2 Petitioner's Motion for Reconsideration was denied by respondent court on September 30, 1992.3

The controversy involves a total of nine thousand six hundred fifty-seven (9,657) square meters of land located in Las Piñas, Metro Manila. The facts show that sometime in 1908, Maria Cailles, married to James Bracewell, Sr., acquired the said parcels of land from the Dalandan and Jimenez families of Las Piñas; after which corresponding Tax Declarations were issued in the name of Maria Cailles. On January 16, 1961, Maria Cailles sold the said parcels of land to her son, the petitioner, by virtue of a Deed of Sale which was duly annotated and registered with the Registry of Deeds of Pasig, Rizal. Tax Declarations were thereafter issued in the name of petitioner, cancelling the previous Tax Declarations issued to Maria Cailles.

On September 19, 1963, petitioner filed before the then Court of First Instance of Pasig, Rizal an action for confirmation of imperfect title under Section 48 of Commonwealth Act No. 141.4The case was docketed as L.R.C. Case No. 4328. On February 21, 1964, the Director of Lands, represented by the Solicitor General, opposed petitioner's application on the grounds that neither he nor his predecessors-in-interest possessed sufficient title to the subject land nor have they been in open, continuous, exclusive and notorious possession and occupation of the same for at least thirty (30) years prior to the application, and that the subject land is part of the public domain.5

The registration proceedings were meanwhile suspended on account of an action filed by Crescencio Leonardo against Maria Cailles before the then Court of First Instance of Pasig, Rizal. The case was finally disposed of by this Court in G.R. No. 51263 where the rights of Maria Cailles were upheld over those of the oppositor Leonardo.6

On March 26, 1985, the entire records of the registration case were forwarded to the Makati Regional Trial Court7 where it was docketed as Land Registration Case No. M-77. The Solicitor General resubmitted his opposition to the application on July 22, 1985,8 this time alleging the following additional grounds: (1) the failure of petitioner to prosecute his action for an unreasonable length of time; and (2) that the tax declarations attached to the complaint do not constitute acquisition of the lands applied for.

On May 3, 1989, the lower court issued an Order granting the application of petitioner.9 The Solicitor General promptly appealed to respondent Court which, on June 29, 1992, reversed and set aside the lower court's Order.10 It also denied petitioner's Motion for Reconsideration in its Resolution of September 30, 1992.11

Hence, the instant Petition anchored upon the following grounds —

I. The Honorable Court of Appeals ERRED in finding that the commencement of thirty (30) year period mandated under Sec. 48 (b) shall commence only on March 27, 1972 in accordance with the classification made by the Bureau of Forestry in First (1st) Indorsement dated August 20, 1986.

II. The Honorable Court of Appeals committed an ERROR in DRAWING conclusion and inference that prior to the declaration by the Bureau of Forestry in March 27, 1972, the parcels of land sought to be registered by Applicant was part of the forest land or forest reserves.

III. The Honorable Court of Appeal ERRED and failed to consider VESTED RIGHTS of the applicant-appellant and his predecessors-in-interest land occupied from 1908.12

The controversy is simple. On one hand, petitioner asserts his right of title to the subject land under Section 48 (b) of Commonwealth Act No. 141, having by himself and through his predecessors-in-interest been in open, continuous, exclusive and notorious possession and occupation of the subject parcels of land, under a bona fide claim of acquisition or ownership, since 1908. On the other hand, it is the respondents' position that since the subject parcels of land were only classified as alienable or disposable on March 27, 1972,13petitioner did not have any title to confirm when he filed his application in 1963. Neither was the requisite thirty years possession met.

We agree with respondents.

In Republic vs. Doldol,14 the requisites to acquire title to public land were laid down, as follows —

. . . . The original Section 48(b) of C.A. No. 141 provided for possession and occupation of lands of the public domain since July 26, 1894. This was superseded by R.A. No. 1942 which provided for a simple thirty-year prescriptive period of occupation by an applicant for judicial confirmation of imperfect title. The same, however, has already been amended by Presidential Decree No. 1073, approved on January 25, 1977. As amended, Section 48(b) now reads:

(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title, except when prevented by wars or force majeure. Those shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter. (emphasis in the original).

Thus, in the aforecited Republic vs. CA case, we stated that the Public Land Act requires that the applicant must prove (a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious possession and occupation of the same must be since time immemorial or for the period prescribed in the Public Land Act. When the conditions set by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a government grant, without the necessity of a certificate of title being issued.

Clear from the above is the requirement that the applicant must prove that the land is alienable public land. On this score, we agree with respondents that petitioner failed to show that the parcels of land subject of his application are alienable or disposable. On the contrary, it was conclusively shown by the government that the same were only classified as alienable or disposable on March 27, 1972. Thus, even granting that petitioner and his predecessors-in-interest had occupied the same since 1908, he still cannot claim title thereto by virtue of such possession since the subject parcels of land were not yet alienable land at that time nor capable of private appropriation. The adverse possession which may be the basis of a grant of title or confirmation of an imperfect title refers only to alienable or disposable portions of the public domain.15

A similar situation in the case of Reyes v. Court of Appeals,16 where a homestead patent issued to the petitioners' predecessor-in-interest was cancelled on the ground that at the time it was issued, the subject land was still part of the public domain. In the said case, this Court ruled as follows —

Under the Regalian doctrine, all lands of the public domain belong to the State, and that the State is the source of any asserted right to ownership in land and charged with the conservation of such patrimony. This same doctrine also states that all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State (Director of Lands vs. Intermediate Appellate Court, 219 SCRA 340).

Hence, the burden of proof in overcoming the presumption of State ownership of lands of the public domain is on the person applying for registration. The applicant must show that the land subject of the application is alienable or disposable. This petitioners failed to do.1âwphi1.nêt

We have stated earlier that at the time the homestead patent was issued to petitioners' predecessor-in-interest, the subject land belong to the inalienable and undisposable portion of the public domain. Thus, any title issued in their name by mistake or oversight is void ab initio because at the time the homestead patent was issued to petitioners, as

successors-in-interest of the original patent applicant, the Director of Lands was not then authorized to dispose of the same because the area was not yet classified as disposable public land. Consequently, the title issued to herein petitioners by the Bureau of Lands is void ab initio.

Prior to March 27, 1972, when the subject parcels of land were classified as inalienable or indisposable, therefore, the same could not be the subject of confirmation of imperfect title. There can be no imperfect title to be confirmed over lands not yet classified as disposable or alienable.17 In the absence of such classification, the land remains unclassified public land until released therefrom and open to disposition.18 Indeed, it has been held that the rules on the confirmation of imperfect title do not apply unless and until the land classified as forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain.19

Neither has petitioner shown proof that the subject Forestry Administrative Order recognizes private or vested rights under which his case may fall. We only find on record the Indorsement of the Bureau of Forest Development20 from which no indication of such exemption may be gleaned.

Having found petitioner to have no cause of action for his application for confirmation of imperfect title, we see no need to discuss the other errors raised in this petition.

WHEREFORE, premises considered, the instant Petition is hereby DENIED for lack of merit. No pronouncement as to costs.

SO ORDERED.

G.R. No. L-12958             May 30, 1960

FAUSTINO IGNACIO, applicant-appellant, vs.THE DIRECTOR OF LANDS and LAUREANO VALERIANO, oppositors-appellees.

Acting Assistant Solicitor General Pacifico P. de Castro and Solicitor Crispin V. Bautista for appellee Director of Lands.Benjamin H. Aquino for appellee Laureano Veleriano.

MONTEMAYOR, J.:

Faustino Ignacio is appealing the decision of the Court of First Instance of Rizal, dismissing his application for the registration of a parcel of land.

On January 25, 1950, Ignacio filed an application for the registration of a parcel of land (mangrove), situated in barrio Gasac, Navotas, Rizal, with an area of 37,877 square meters. Later, he amended his application by alleging among others that he owned the parcel applied for by right of accretion. To the application, the Director of Lands, Laureano Valeriano and Domingo Gutierrez filed oppositions. Gutierrez later withdrew his opposition. The Director of Lands claimed the parcel applied for as a portion of the public domain, for the reason that neither the applicant nor his predecessor-in-interest possessed sufficient title thereto, not having acquired it either by composition title from the Spanish government or by possessory information title under the Royal Decree of February 13, 1894, and that he had not possessed the same openly, continuously and adversely under a bona fide claim of ownership since July 26, 1894. In his turn, Valeriano alleged he was holding the land by virtue of a permit granted him by the Bureau of Fisheries, issued on January 13, 1947, and approved by the President.

It is not disputed that the land applied for adjoins a parcel owned by the applicant which he had acquired from the Government by virtue of a free patent title in 1936. It has also been established that the parcel in question was formed by accretion and alluvial deposits caused by the action of the Manila Bay which boarders it on the southwest. Applicant Ignacio claims that he had occupied the land since 1935, planting it with api-api trees, and that his possession thereof had been continuous, adverse and public for a period of twenty years until said possession was distributed by oppositor Valeriano.

On the other hand, the Director of Lands sought to prove that the parcel is foreshore land, covered by the ebb and flow of the tide and, therefore, formed part of the public domain.

After hearing, the trial court dismissed the application, holding that the parcel formed part of the public domain. In his appeal, Ignacio assigns the following errors:

I. The lower court erred in holding that the land in question, altho an accretion to the land of the applicant-appellant, does not belong to him but forms part of the public domain.

II. Granting that the land in question forms part of the public domain, the lower court nevertheless erred in not declaring the same to be the necessary for any public use or purpose and in not ordering in the present registration proceedings.

III. The lower court erred in not holding that the land in question now belongs to the applicant-appellant by virtue of acquisitive prescription, the said land having ceased to be of the public domain and became the private or patrimonial property of the State.

IV. The lower court erred in not holding that the oppositor Director of Lands is now in estoppel from claiming the land in question as a land of the public domain.

Appellant contends that the parcel belongs to him by the law of accretion, having been formed by gradual deposit by action of the Manila Bay, and he cites Article 457 of the New Civil Code (Article 366, Old Civil Code), which provides that:

To the owners of lands adjoining the banks of rivers belong the accretion which they gradually receive from the effects of the current of the waters.

The article cited is clearly inapplicable because it refers to accretion or deposits on the banks of rivers, while the accretion in the present case was caused by action of the Manila Bay.

Appellant next contends that Articles 1, 4 and 5 of the Law of Waters are not applicable because they refer to accretions formed by the sea, and that Manila Bay cannot be considered as a sea. We find said contention untenable. A bay is a part of the sea, being a mere indentation of the same:

Bay. — An opening into the land where the water is shut in on all sides except at the entrance; an inlet of the sea; an arm of the sea, distinct from a river, a bending or curbing of the shore of the sea or of a lake. 7 C.J. 1013-1014 (Cited in Francisco, Philippine Law of Waters and Water Rights p. 6)

Moreover, this Tribunal has some cases applied the Law of Waters on Lands bordering Manila Bay. (See the cases of Ker & Co. vs. Cauden, 6 Phil., 732, involving a parcel of land bounded on the sides by Manila Bay, where it was held that such land formed by the action of the sea is property of the State; Francisco vs. Government of the P.I., 28 Phil., 505, involving a land claimed by a private person and subject to the ebb and flow of the tides of the Manila Bay).

Then the applicant argues that granting that the land in question formed part of the public domain, having been gained from the sea, the trial court should have declared the same no longer necessary for any public use or purpose, and therefore, became disposable and available for private ownership. Article 4 of the Law of Waters of 1866 reads thus:

ART. 4. Lands added to the shores by accretions and alluvial deposits caused by the action of the sea, form part of the public domain. When they are no longer washed by the waters of the sea and are not necessary for purposes of public utility, or for the establishment of special industries, or for the coastguard service, the Government shall declare them to be the property of the owners of the estates adjacent thereto and as increment thereof.

Interpreting Article 4 of the Law of Waters of 1866, in the case of Natividad vs. Director of Lands, (CA) 37 Off. Gaz., 2905, it was there held that:

Article 4 of the Law of Waters of 1866 provides that when a portion of the shore is no longer washed by the waters of the sea and is not necessary for purposes of public utility, or for the establishment of special industries, or for coastguard service, the government shall declare it to be the property of the owners of the estates adjacent thereto and as an increment thereof. We believe that only the executive and possibly the legislative departments have the authority and the power to make the declaration that any land so gained by the sea, is not necessary for purposes of public utility, or for the establishment of special industries, on for coast-guard service. If no such declaration has been made by said departments, the lot in question forms part of the public domain. (Natividad  vs. Director of Lands, supra.)

The reason for this pronouncement, according to this Tribunal in the case of Vicente Joven y Monteverde vs. Director of Lands, 93 Phil., 134, (cited in Velayo's Digest, VI. I, p. 52).

. . . is undoubtedly that the courts are neither primarily called upon, nor indeed in a position to determine whether any public land are to be used for the purposes specified in Article 4 of the Law of Waters.

Consequently, until a formal declaration on the part of the Government, through the executive department or the Legislature, to the effect that the land in question is no longer needed for coast guard service, for public use or for special industries, they continue to be part of the public domain, not available for private appropriation or ownership.

Appellant next contends that he had acquired the parcel in question through acquisitive prescription, having possessed the same for over ten years. In answer, suffice it to say that land of the public domain is not subject to ordinary prescription. In the case of Insular Government vs. Aldecoa & Co., 19 Phil., 505 this Court said:

The occupation or material possession of any land formed upon the shore by accretion, without previous permission from the proper authorities, although the occupant may have held the same as owner for seventeen years and constructed a wharf on the land, is illegal and is a mere detainer, inasmuch as such land is outside of the

sphere of commerce; it pertains to the national domain; it is intended for public uses and for the benefit of those who live nearby.

We deem it unnecessary to discuss the other points raised in the appeal.

In view of the foregoing, the appealed decision is hereby affirmed, with costs.

.R. No. L-69002 June 30, 1988

REPUBLIC OF THE PHILIPPINES, petitioner, vs.AMANDA LAT VDA. DE CASTILLO, FLORENCIO T. CASTILLO, SOLEDAD LOTA CASTILLO, CARLOS L. CASTILLO, NIEVES KATIGBAK CASTILLO, MARIANO L. CASTILLO, HIPOLITA DYTIAPCO CASTILLO, AIDA CASTILLO HERRERA, HERMITO HERRERA, JOSE L. CASTILLO, LILIA MACEDA CASTILLO, TERESITA L. CASTILLO, REGISTER OF DEEDS OF BATANGAS and THE INTERMEDIATE APPELLATE COURT,respondents.

Castro, Nardo, Quintanilla, Gonzales & Macatangay Law Office for respondents.

 

PARAS, J.:

This is a petition for review on certiorari of the April 26, 1984 Decision of the then Intermediate Appellate Court * reversing the February 6, 1976 Decision of the then Court of First Instance of Batangas, Branch VI, in Civil Case No. 2044.

The antecedental facts of this case, as found by the then Intermediate Appellate Court, are as follows:

Sometime in 1951, the late Modesto Castillo applied for the registration of two parcels of land, Lots 1 and 2, located in Banadero, Tanauan, Batangas, described in Plan Psu-119166, with a total area of 39,755 square meters. In a decision dated August 31, 1951, the said Modesto Castillo, married to Amanda Lat, was declared the true and absolute owner of the land with the improvements thereon, for which Original Certificate of Title No. 0-665 was, issued to him by the Register of Deeds at Batangas, Batangas, on February 7, 1952. By virtue of an instrument dated March 18, 1960, the said Lots 1 and 2 covered by Original Certificate of Title No. 0-665, together with Lot No. 12374 covered by Transfer Certificate of Title No. 3254-A and Lot No. 12377 covered by Transfer Certificate of Title No. 3251-A, were consolidated and sub-divided into Lots 1 to 9 under Pcs-1046. After the death of Modesto Castillo, or on August 31, 1960, Amanda Lat Vda. de Castillo, et al., executed a deed of partition and assumption of mortgage in favor of Florencio L. Castillo, et al., as a result of which Original Certificate of Title No. D-665 was cancelled, and in lieu thereof, new transfer cerfificates of title were issued to Florencio Castillo, et al., to wit: Transfer Certificate of Title No. 21703 (Lot 4) (and) Transfer Certificate of Title No. 21704 to Florencio Castillo (Lot 5); Transfer Certificate of Title No. T-21708 to Carlos L. Castillo (Lot 7); Transfer Certificate of Title No. T-21712 to Mariano L. Castillo (Lot 6); Transfer Certificate of Title No. T-21713 to Jose L. Castillo (Lot 9); Transfer Certificate of Title No. T-21718 to Aida C. Herrera (Lot 2); and Transfer Certificate of Title No. T-21727 to Teresita L. Castillo (Lot 8).

The Republic of the Philippines filed Civil Case No. 2044 with the lower court for the annulment of the certificates of title issued to defendants Amanda Lat Vda. de Castillo, et al., as heirs/successors of Modesto Castillo, and for the reversion of the lands covered thereby (Lots 1 and 2, Psu-119166) to the State. It was alleged that said lands had always formed part of the Taal Lake, washed and inundated by the waters thereof, and being of public ownership, it could not be the subject of registration as private property. Appellants herein, defendants below, alleged in their answer that the Government's action was already barred by the decision of the registration court; that the action has prescribed; and that the government was estopped from questioning the ownership and possession of appellants.

After trial, the then Court of First Instance of Batangas, Branch VI, presided over by Honorable Benjamin Relova, in a Decision dated February 6, 1976 (Record on Appeal, pp. 62-69), ruled in favor of herein petitioner Republic of the Philippines. The decretal portion of the said decision, reads:

WHEREFORE, the Register of Deeds of Batangas is hereby ordered to cancel Original Certificate of Title No. 0-665 in the name of Modesto Castillo and the subsequent Transfer of Certificates of Title issued over

the property in the names of the defendants. Lots Nos. 1 and 2 of Plan Psu-19166 are hereby declared public lands belonging to the state. Without pronouncement as to costs.

The Court of Appeals, on appeal, in a Decision promulgated on April 26,1984, reversed and set aside the appealed decision, and dismissed the complaint (Record, pp. 31-41). Herein petitioner filed a Motion for Reconsideration (Record, pp. 42-51), but the same was denied in a Resolution promulgated on October 12,1984 (Record, p. 52). Hence, the instant petition.

The sole issue raised in this case is whether or not the decision of the Land Registration Court involving shore lands constitutes res adjudicata.

There is no question that one of the requisites of res judicata is that the court rendering the final judgment must have jurisdiction over the subject matter (Ramos v. Pablo, 146 SCRA 24 [1986]; that shores are properties of the public domain intended for public use (Article 420, Civil Code) and, therefore, not registrable. Thus, it has long been settled that portions of the foreshore or of the territorial waters and beaches cannot be registered. Their inclusion in a certificate of title does not convert the same into properties of private ownership or confer title upon the registrant (Republic v. Ayala y Cia, 14 SCRA, 259 [1965], citing the cases of Dizon, et al. v. Bayona, et al., 98 Phil. 943; and Dizon, et al. v. Rodriguez, et al., 13 SCRA 704).

But an important bone of contention is the nature of the lands involved in this case.

Petitioner contends "that "Lots 1 and 2, PSU-119166 had always formed part of the Taal Lake, washed and inundated by the waters thereof. Consequently, the same were not subject to registration, being outside the commerce of men; and that since the lots in litigation are of public domain (Art. 502), par. 4 Civil Code) the registration court (of 1951) did not have jurisdiction to adjudicate said lands as private property, hence, res judicata does not apply. (Rollo, pp. 37-38).

The Government presented both oral and documentary evidence.

As summarized by the Intermediate Appelate Court (now Court of Appeals), the testimonies of the witnesses for the petitioner are as follows:

1. Rosendo Arcenas, a Geodetic Engineer connected with the Bureau of Lands since 1961, testified to the effect that Lots 1 and 2, Psu-119166, which are the lots in question, adjoin the cadastral survey of Tanauan, Batangas (Cad. 168); that the original boundary of the original cadastral survey was foreshore land as indicated on the plan; that the cadastral survey of Tanauan was executed sometime in 1923; that the first survey executed of the land after 1923 was the one executed in 1948 under Plan Psu-119166 that in the relocation survey of the disputed lots in 1962 under SWO-40601, said lots were annotated on the plan as claimed by the Republic of the Philippines in the same manner that it was so annotated in Plan Psu-119166; thus showing that the Government was the only claimant of the land during the survey in 1948; that during the relocation survey made in 1962, old points cannot be Identified or located because they were under water by about forty centimeters; that during the ocular inspection of the premises on November 23, 1970, he found that 2 monuments of the lots in question were washed out by the waters of the Baloyboy Creek; that he also found duck pens along the lots in question; that there are houses in the premises as well as some camotes and bananas; and that he found also some shells ('suso') along the banks of the Taal lake (Tsn, Nov. 16, 1970, pp. 13-21; Feb. 16, 1971, pp. 4-36).

2. Braulio Almendral testified to the effect that he is a resident of Tanauan, Batangas, near the Taal lake; that like himself there are other occupants of the land among whom are Atanacio Tironas, Gavino Mendoza, Juliano Tirones, Agapito Llarena, etc.; that it was they who filled up the area to make it habitable; that they filled up the area with shells and sand; that their occupation is duck raising; and that the Castillos never stayed in or occupied the premises (Tsn, Nov. 16, 1970, pp. 32-50).

3. Arsenio Ibay, a Geodetic Engineer connected with the Bureau of Lands since 1968, also testified to the effect that in accordance with the cadastral plan of Tanauan, the only private claim of Sixto Castillo referred to Lots 1006 to 1008; that the Castillos never asserted any private claim to the lots in question

during the cadastral survey;' that in the preparation of plan Psu-119166, Lots 12374 and 12377 were made as reference to conform to previously approved plans; that lot 12374 is a portion of cadastral lot 10107, SWO-86738 while Lot 22377 is a portion of Lot 10108 of the same plan (Tsn, Nov. 25, 1970, pp. 115-137).

4. Jose Isidro, a Land Investigator of the Bureau of Lands, testified to the effect that pursuant to the order of the Director of Lands, he, together with Engineer Rufino Santiago and the barrio captain of Tanauan, Batangas, conducted an investigation of the land in question; that he submitted a report of investigation, dated October 19, 1970 (Exh. H-1); that portions of the lot in question were covered by public land applications filed by the occupants thereof; that Engineer Santiago also submitted a report (Exh. H-8); that he had notified Dr. Mariano Castillo before conducting the investigation (Tsn, Nov. 25,1970, pp. 137-162).

5. Rufino Santiago, another Geodetic Engineer connected with the Bureau of Lands, testified to the effect that on October 19,1970, he submitted a report of investigation regarding the land in question; that he noted on the plan Exhibit H-9 the areas on which the houses of Severo Alcantara and others were built; that he found that the land was planted to coconuts which are about 15 years old; that the land is likewise improved with rice paddies; that the occupants thereof are duck raisers; that the area had been elevated because of the waste matters and duck feeds that have accumulated on the ground through the years (Tsn, Nov. 26,1970, pp. 163-196).

6. Pablo Tapia, Barrio Captain of Tanauan, Batangas, since 1957, testified to the effect that the actual occupants of Lots I and 2 are Atanacio Tirones,tc.; that during the war the water line reached up to a point marked Exhibit A-9 and at present the water has receded to a point up to Exhibit A-12; that the reasons why the waters of Taal lake have receded to the present level is because of the fillings made by the people living in Lots 1 and 2; that there are several duck pens all over the place; that the composition of the soil is a mixture of mud and duck feeds; that improvements consist of bananas, bamboos and palay; that the shoreline is not even in shape because of the Baloyboy Creek; that the people in the area never came to know about the registration case in which the lots in question were registered; that the people living in the area, even without any government aid, helped one another in the construction of irrigated rice paddies; that he helped them file their public land applications for the portions occupied by them; that the Castillos have never been in possession of the premises; that the people depend upon duck raising as their means of their livelihood; that Lots 1 and 2 were yet inexistent during the Japanese occupation; and that the people started improving the area only during liberation and began to build their houses thereon. (Tsn, Nov. 26,1970, pp. 197-234).

Among the exhibits formally offered by the Government are: the Original Plan of Tanauan, Batangas, particularly the Banader Estate, the Original Plan of PSU-119166, Relocation Verification Survey Plan, maps, and reports of Geodetic Engineers, all showing the original shoreline of the disputed areas and the fact that the properties in question were under water at the time and are still under water especially during the rainy season (Hearing, March 17,1971, TSN, pp. 46-47).

On the other hand, private respondents maintain that Lots 1 and 2 have always been in the possession of the Castillo family for more than 76 years and that their possession was public, peaceful, continuous, and adverse against the whole world and that said lots were not titled during the cadastral survey of Tanauan, because they were still under water as a result of the eruption of Taal Volcano on May 5, 1911 and that the inundation of the land in question by the waters of Taal Lake was merely accidental and does not affect private respondents' ownership and possession thereof pursuant to Article 778 of the Law of Waters. They finally insisted that this issue of facts had been squarely raised at the hearing of the land registration case and, therefore, res judicata (Record on Appeal, pp. 63-64). They submitted oral and documentary evidence in support of their claim.

Also summarized by respondent Appellate Court, the testimonies of the witnesses of private respondents are as follows:

1. Silvano Reano, testified to the effect that he was the overseer of the property of the late Modesto Castillo located at Banadero,Tanauan, Batangas since 1944 to 1965; that he also knows Lots 1 and 2, the parcels of land in question, since he was managing said property; that the occupants of said Lots 1 and 2 were engaged in duck raising; that those occupants were paying the Castillos certain amount of money because their animals used to get inside the lots in question; that he was present during the survey of the land in 1948; and that aside from the duck pens which are built in the premises, the land is planted to rice (Tsn, April 14, 1971, pp. 62-88).

2. Dr. Mariano Castillo, testified to the effect that the late Modesto Castillo was a government official who held high positions in the Government; and that upon his death the land was subdivided among his legal heirs. (Appellee's Brief, pp. 4-9).

As above-stated, the trial court decided the case in favor of the government but the decision was reversed on appeal by the Court of Appeals.

A careful study of the merits of their varied contentions readily shows that the evidence for the government has far outweighed the evidence for the private respondents. Otherwise stated, it has been satisfactorily established as found by the trial court, that the properties in question were the shorelands of Taal Lake during the cadastral survey of 1923.

Explaining the first survey of 1923, which showed that Lots 1 and 2 are parts of the Taal Lake, Engineer Rosendo Arcenas testified as follows:

ATTY. AGCAOILI:

Q Now, you mentioned Engineer that a subject matter of that plan which appears to be Lots 1 and 2 are adjoining cadastral lots of the Tanauan Cadastre, now, will you please state to the Court what is the basis of that statement of yours?

A The basis of that statement is the plan itself, because there is here an annotation that the boundary on the northeastern side is Tanauan Cadastre 168 which indicates that the boundary of the original cadastral survey of Tanauan Cadastre way back in the year 1923 adjoins a foreshore land which is also indicated in this plan as foreshore lands of Taal lake, sir.

xxx xxx xxx

Q Now, on this plan Exhibit "A-2", there are two lots indicated namely, Lots 12374 and 12377, what do these lots represent?

A This is the cadastral lot executed in favor of a certain Modesto Castillo that corresponds to Lots 12374 and another Lot 12377, sir.

Q At the time this survey plan Psu-119166 and marked as Exhibit "A-2" was executed in 1948, were these lots 1 and 2 already in existence as part of the cadastral survey?

A No, sir, because there is already a foreshore boundary.

Q Do I understand from you Mr. Witness at the time of the survey of this land these two lots form part of this portion?

A Yes, sir.

Q When again was the cadastral survey of Tanauan, Batangas, executed if you know?

A In the year 1923, sir. (Hearing of Nov. 16, 1970, TSN pp. 15-17).

Such fact was further verified in the Verification-Relocation Survey of 1948 by Engineer Arcenas who conducted said survey himself and reported the following:

That as per original plan Psu-119166, it appears that Lot 1 and Lot 2, Psu-119166 surveyed and approved in the name of Modesto Castillo is a portion of Taal Lake and as such it appears to be under water during the survey of cadastral Lot No. 12374 and Lot No. 12377, which was surveyed and approved in the name of Modesto Castillo under Cad. 168. To support this theory is the annotation appearing and printed along lines 2-3-4-5 of Lot 1, Psu-119166 and along lines 4-5-6 of Lot 2, Psu-119166 which notations clearly indicates that such boundary of property was a former shorelines of Taal Lake, in other words, it was the extent of cultivation being the shorelines and the rest of the area going to the southwestern direction are already covered by water level.

Another theory to bolster and support this Idea is the actual location now in the verification-relocation survey of a known geographic point were Barrio Boundary Monument (BBM N. 22) is under water level quite for sometimes as evidence by earthworks (collection of mud) that amount over its surface by eighty (80) centimeters below the ground, see notation appearing on verification-relocation plan previously submitted. (Re-Verification-Relocation Survey Exhibits, pp. 64-65).

Said surveys were further confirmed by the testimonies of witnesses to the effect that from 1950 to 1969, during rainy season, the water of Taal lake even went beyond the questioned lots; and that the water, which was about one (1) foot, stayed up to more or less two (2) to three (3) months (Testimonies of Braulio Almendral and Anastacio Tirones both residents of Banadero, Tanauan, Batangas (Hearing of Nov. 16, 1970, TSN, pp. 41-42 and Hearing of Nov. 23, 1970, TSN, pp. 93, 98-99, respectively). In the Relocation Survey of 1962, there were no definite boundary or area of Lots 1 and 2 because a certain point is existing which was under water by 40 centimeters (Testimony of Engineer Arcena, Hearing of Nov. 16,1970, TSN, p. 20).

Lakeshore land or lands adjacent to the lake, like the lands in question must be differentiated from foreshore land or that part of the land adjacent to the sea which is alternately covered and left dry by the ordinary flow of the tides (Castillo, Law on Natural Resources, Fifth Edition, 1954, p. 67).

Such distinction draws importance from the fact that accretions on the bank of a lake, like Laguna de Bay, belong to the owners of the estate to which they have been added (Gov't. v. Colegio de San Jose, 53 Phil. 423) while accretion on a sea bank still belongs to the public domain, and is not available for private ownership until formally declared by the government to be no longer needed for public use (Ignacio v. Director of Lands, 108 Phil. 335 [1960]).

But said distinction will not help private respondents because there is no accretion shown to exist in the case at bar. On the contrary, it was established that the occupants of the lots who were engaged in duck raising filled up the area with shells and sand to make it habitable.

The defense of long possession is likewise not available in this case because, as already ruled by this Court, mere possession of land does not by itself automatically divest the land of its public character (Cuevas v. Pineda, 143 SCRA 674 [1968]).

PREMISES CONSIDERED, the April 26,1984 Decision of the then Intermediate Appellate Court is hereby SET ASIDE and REVERSED and the February 6,1976 Decision of the then Court of First Instance of Batangas is hereby AFFIRMED and REINSTATED.

SO ORDERED.

G.R. No. L-23481 June 29, 1972

BISHOP OF CALBAYOG, Mons. Miguel F. Acebedo, applicant-appellant, vs.THE DIRECTOR OF LANDS and THE MUNICIPALITY OF CATARMAN, SAMAR, oppositors-appellees.

Padilla Law Office for applicant-appellant.

Provincial Fiscal Eliseo de Veyra and Assistant Provincial Fiscal Espiridion R. Lim of Samar for oppositors-appellees.

 

MAKALINTAL, J.:p

This is an appeal from the decision of the Court of First Instance of Samar in Land Registration Case No. 3448 involving three parcels of land located in Catarman, Samar (denominated as Lots 1, 2 and 3), titles to which were sought to be confirmed and registered in favor of the Bishop of Calbayog. The lower court adjudicated Lot 2 in favor of the Municipality of Catarman and declared the eastern portion of Lot 1, and the portions of Nalazon street and Anunciacion street traversing said Lot 1 and Lot 2, as public plaza and public thoroughfares, respectively, and hence not subject to registration.

The petition for registration was filed by the Bishop of Calbayog, as a corporation sole, on March 27, 1953, alleging open, continuous, exclusive and notorious possession, since the Spanish regime, of three parcels of land known as Lot 1 and 2 in the survey plan Exhibit D, dated September 14-15, 1951, and Lot 3 in the survey plan Exhibit E, the first two lots situated in the poblacion of Catarman, Samar, and the third in barrio Cawayan.

Opposition to the application was filed by the Director of Lands with respect to the three lots on October 1, 1953, and by the Municipality of Catarman with respect to Lot 2 during the survey thereof.

On October 15, 1955 the lower court issued an order of general default except as against the aforementioned oppositors. In the same order the Municipality of Catarman was given 5 days from notice within which to submit in proper form its opposition with respect to Lot 2. Copy of the order of general default was received by the municipal secretary on October 18, 1955, and on October 21 the Municipality of Catarman filed its formal opposition as ordered. On November 28, 1956 it filed an amended opposition, including therein the eastern portion of Lot 1 and portions of Nalazon street and Anunciacion street traversing said Lot 1. A second amended opposition was filed on June 15, 1957, particularly describing Lot 1 and Lot 2 and alleging that the eastern portion of Lot 1, being a municipal plaza, was registrable in favor of the municipality.

After initial hearing the lower court, in an order dated June 15, 1957, denied the amendment on the ground that the proper procedure, which was by means of petition for relief from the order of general default, had not been resorted to.

After trial on the merits the lower court rendered its decision on April 18, 1964 (1) ordering the applicant to segregate from Lot I Nalazon street and Anunciacion street as public thoroughfares and the eastern portion of Lot 1, beginning from Nalazon street up to Mendiola street, as public plaza of the Municipality of Catarman; (2) confirming the imperfect title of the applicant over the remaining portion of Lot 1, with all the improvements existing thereon, and ordering that the same be registered in the name of the Bishop of Calbayog as a corporation sole; (3) adjudicating Lot 2, together with all the improvements existing thereon, except the portion of Nalazon street along the eastern boundary of the lot, in favor of the Municipality of Catarman; and (4) confirming the applicant's title over Lot 3 and ordering that the same be registered in the name of the Bishop of Calbayog.

The Bishop of Calbayog appealed.

The evidence discloses the following pertinent facts: The survey plan presented by the applicant as Exhibit D, which was executed on September 14-15, 1951, shows that the entire area of Lot 1 is 17,571 square meters, more o less. It is bounded on the north by a provincial road (now Rizal St.), on the east by Mendiola St., on the south by Bonifacio St., and on the west by a national road (Trece Martires del 1900 St.). Opposite Lot 1 to the northwest is Lot 2, which has an area of

approximately 4,707 square meters. It is bounded by the provincial road (Rizal St.) on the south, on the west by the national road (Trece Martires del 1900 St.), on the north by Blumentrit St. and on the east by a municipal lot.

The survey plan does not contain any other information or markings. But from the undisputed actual observation by the lower court as well as from the description given by the witnesses for both parties, Nalazon St., which traverses the entire length of the poblacion from south to north, crosses Jacinto and Real streets and cuts across Lot 1 from Bonifacio St. to Rizal St., passing immediately in front of the church and the convent. It extends across Lot 2 along its eastern boundary from Rizal St. to Blumentrit St. Thus, from actual observation Lot 2 appears bounded on the east by Nalazon St. and not by the municipal lot as described in the survey plan. With respect to Lot 1, Nalazon St. divides the lot into the western portion, which forms about 2/3 of the entire area, and the eastern portion which comprises the other 1/3. All the permanent improvements on Lot 1, which include the Roman Catholic church, the belfry and convent, the St. Michael Academy building and a nun's residence, are found on the western portion. Lot 2 has no permanent improvements. The eastern portion of Lot 1, the area in contention, is an empty space except for concrete benches along the perimeter. A partly cemented path runs across this lot from east to west leading up to the front or entrance of the church and appears to be an extension of Anunciacion St., which runs from the bank of the Catarman river up to Mendiola St. In the middle of this path, half-way between Mendiola St. and the church, is a statue of the Sacred Heart of Jesus.

The Roman Catholic Church relies on the testimony of its witnesses to prove its ownership. Mariano Singzon, 59 years old and one-time municipal councilor of Catarman and also counsel in this case for the applicant, was the principal witness. The following is his testimony: Prior to 1910 the portions of Nalazon and Anunciacion streets traversing Lot 1 and Lot 2 were merely trails used by the parishioners in going to and from the church. A retracing (Exhibit M) of a survey plan of the poblacion of Catarman executed in 1909 shows that Anunciacion St. stopped at Calle Garfil (now Mendiola St.) and that there was no other street traversing Lot 1. According to Atty. Singzon, Nalazon St. was opened and improved by the municipality sometime in 1910 or 1911. Anunciacion St. was opened only about 2 years before the trial of the case. In 1920, the municipality planted acacia trees on both sides of Nalazon St. inside Lot 1 and along Mendiola St. bordering Lot 1 but these trees were recently cut down upon order of the priest, Fr. Ricalde, and all that remain are stumps. The statue of the Sacred Heart found in the middle of Anunciacion St. was put up in 1927, but the base of the statue had been standing on that site even before 1905. The Roman Catholic Church had made no improvements on this eastern portion of Lot 1, which at present is being used as a public playground, although a bandstand stood there for about three years after it was constructed in 1926 by the members of an orchestra which was organized by a Fr. Ranera and which used to give musical performances on the bandstand. On the feast of Corpus Christi the parishioners would construct an altar on this lot and hold the procession there.

With respect to Lot 2, although the Church had made no improvements thereon, around the turn of the century there were camarins on this lot which were used as stables for the horses and cows owned by a Fr. Troquillo. In 1933 the municipal council passed a resolution (Exhibit G) asking the Bishop of Calbayog, then Mons. Hacbang, to donate a small portion of this lot for the construction of a monument in honor of the Trece Martires del 1900, but this request was denied by the Bishop. Gonzalo Olmedo, the municipal secretary of Catarman in 1933 whose signature appears on Exhibit G, testified as to the authenticity of the resolution and even pointed to the western portion of Lot 2 as the subject matter of the request. Mons. Desoloc, who acted as private secretary to the Bishop at that time, testified that the writing on the lower right hand corner of Exhibit G, which reads "cont. negativ" is the handwriting of the Bishop and was meant to impart an order that the request contained in the resolution be denied. In 1949 Mayor Eusebio Moore of Catarman and Fr. Ortega asked him, Atty. Singzon, to draft a contract of exchange between Lot 2 and a lot owned by the municipality, but the exchange did not materialize because the lot intended to be bartered by the municipality had no title, although he (the witness) found a copy of a tax declaration (Exhibit F) for Lot 2 dated May 8, 1948 in the name of the Roman Catholic Church. This tax declaration describes Lot 2 as being bounded by Trece Martires del 1900 on the west, Nalazon St. (instead of the municipal lot as described in Exhibit D) on the east, Blumentrit St. on the north and Rizal St. on the south.

The testimony of Atty. Singzon was corroborated by Candido Franzuela, a 63 year-old resident of Catarman and brother of Fr. Franzuela of the same municipality as well as Salvadora Olmedo, an 82 year-old local resident, who died after giving her direct testimony. Franzuela confirmed the existence on Lot 2 of camarins used as stables for the cattle owned by the church.

He remembered that sometime in 1927 a group of Chinese asked permission from the parish priest to use the lot as a football ground, which they did for 2 years. On cross-examination he admitted that before Nalazon St. was extended there was no visible boundary between Lot 2 claimed by the Church and the municipal lot on which a public school building used to stand. Salvadora Olmedo also testified that when she was yet schooling a certain Fr. Troquillo had camarins on Lot 2 which he used as stables for his cows and horses and that whenever she and her classmates wanted to gather flowers on this lot they asked permission from the priest.

The case for oppositors was presented by the following witnesses:

1. Martin Evangelista, 65 years old and former municipal treasurer of Catarman, declared that as property custodian of the municipality before his retirement, he knew that Lot 2 was owned by the municipality. This lot was fenced by the municipality first with bamboos and then with barbed wire because the municipal prisoners were planting camotes on this lot. On February 21, 1952 Fr. Franquela personally handed to him a letter (Exhibit 1) asking that he be allowed to use a portion of Lot 2 as playground for the students of St. Michael Academy. He endorsed the letter to the municipal council of Catarman, which passed Resolution No. 19 (Exhibit 3), declaring Lot 2 as temporary public playground until such time that the municipality was ready to construct a permanent improvement thereon.

2. Eusebio Moore, 54, mayor of Catarman since 1948, declared that Lot 2 was owned by the municipality because when he was in the elementary grades he attended classes in a public school building located on the municipal lot next to Lot 2 and did school gardening on Lot 2. When he was in Grade 6, as leader of the school football team he invited the Chinese team to play and he was the one who asked permission from the municipal president to use Lot 2 as their football ground. When he assumed office in 1948 he had the lot fenced and planted to fruit trees and during fiestas temporary sheds would be put up for rent to itinerant merchants. It was Fr. Ortega who went to see him in 1949 regarding the fencing of Lot 2 by the municipality and together they discussed the matter with Atty. Singzon, the lawyer for the Church, and the latter suggested to him that Lot 2 be exchanged with another lot owned by the municipality and he replied that it was up to the municipal council to decide. In 1950 he had the lot declared for taxation purposes. The tax declaration (Exhibit 5) covers the entire area of Lot 2 claimed by the applicant as well as the uncontested municipal lot, from Trece Martires del 1900 on the west to Mendiola St. on the east, Blumentrit St. on the north and Rizal St. on the south. This tax declaration was marked on the reverse side as newly issued because according to him the old tax declaration could not be located as the public records had been destroyed during the war. Mayor Moore denied the authenticity of Resolution No. 19 (Exh. G) sent by the municipal council to the Bishop in 1933 on the ground that the document is in Spanish, language not spoken either by the municipal secretary who certified as to the correctness of the resolution or by the municipal president, who supposedly dictated its text. The witness produced the affidavits of Pelayo Saldo, municipal councilor in 1933 and one of those listed as present when the resolution was taken up, to the effect that Lot 2 is owned by the municipality. He also produced a similar affidavit executed by Antonio Oladive, a former municipal president of Catarman. To further buttress the municipality's position the mayor produced a letter dated February 29, 1952 by Matias Rodriguez, representing the Northern Samar Academy, requesting that Lot 2 be used as playground for the school. The mayor disclosed that he, the mayor, had been president of the Northern Samar Academy. Nalazon St. and Anunciacion St., according to Mayor Moore, are cleaned and maintained by the municipality. With respect to the eastern portion of Lot 1 the same had always been regarded as owned by the municipality because the municipal building used to face this lot, although when he assumed the office of Mayor he had the backyard of the municipal building improved and the stairway transferred there.

3. Gaudencio Camposano, a 75 year-old resident of Catarman, testified that a bandstand was constructed on the eastern portion of Lot 1 in 1905 and it was not only the orchestra organized by Fr. Ranera that used to play there but also the municipal band. He also testified that when he was attending school in 1905 the school garden was located inside Lot 2, which he believed to be in the possession of the municipality because nobody owned it and when he became acting mayor he required the prisoners to clear Lot 2 and had it planted to camotes and bananas.

The conclusion that may be drawn from the evidence on record is that Lot 2, called the "town plaza" by oppositor, is a public plaza and that Nalazon St., traversing Lot I and Lot 2, is a public thoroughfare and should therefore be excluded from the application for registration filed by the Church.

Admittedly Nalazon St. was originally merely a trail used by the parishioners in going to and from the church. But since 1910, when it was opened and improved as a public thoroughfare by the municipality, it had been continuously used as such by the townspeople of Catarman without objection from the Church authorities. The acacia trees along both sides of the street were planted by the municipality in 1920, although these trees were cut down recently upon order of the priest. There is no proof that the Church merely tolerated and limited the use of this street for the benefit of its parishioners, considering that the street traverses the entire length of the poblacion from south to north and that Lot 1, on which the church stands, is located almost at the center of the poblacion. The street does not stop on Lot I but extends north toward the sea, passing along the lot occupied by the Central Elementary School and the Northern Samar General Hospital. Thus it is clear that Nalazon St. inside Lot 1 is used by the residents not only in going to the church but to the public school and the general hospital north of Lot 1.

With respect to Lot 2, there is no evidence that either the Church or the municipality exercised clear acts of ownership or of exclusive possession over this lot. It is true that there were witnesses who testified that around the turn of the century there were camarinsinside this lot used as stables for the horses and cows owned by a Fr. Troquillo. But these witnesses likewise testified that this lot had been used also as a playground as well as a school garden by the students of the public school located on the adjoining municipal lot. This lot still serves as a public playground up to the present. The municipality also makes use of this lot during town fiestas by constructing temporary sheds which are rented to itinerant vendors. In 1949 the municipality constructed a fence around this lot because the prisoners planted it to camotes. The Church, however, objected to the putting up of the fence.

All these facts only show that neither the Church nor the municipality possessed Lot 2 exclusively. While it may be true that as late as 1933 the municipality acknowledged the ownership of the Church over Lot 2 and in 1949 the Church declared this lot for tax purposes, the continuous use thereof enjoyed by the residents of Catarman is admitted by all the witnesses. Thus, even the witness for the applicant testified that the Church had made no improvements on Lot 2 and that the same had been used primarily as playground for schoolchildren. The municipality stands on the same footing as the Church. The tax declaration in its name was issued only in 1950, when the present dispute was already imminent. The letters of Fr. Franzuela and Mr. Matias Rodriguez asking permission to use this lot as a playground are not proof of municipal ownership, since after all the municipal government may be considered the administrator of public property, that is, property for public use.

In the case of Harty vs. Municipality of Victoria, 13 Phil. 152, involving the question as to the ownership of a parcel of land which surrounded the parish church of the town, this Court said:

Even though all the remaining space of land which now forms the great plaza of the town of Victoria had been owned by the said Tañedo, it must be presumed that he waived his right thereto for the benefit of the townspeople, since from the creation or establishment of the town, down to the present day, all the residents, including the curate of said town, have enjoyed the free use of said plaza.

xxx xxx xxx

That both the curates and the gobernadorcillos of said town procured fruit trees and plants to be set out in the plaza, does not constitute an act of private ownership, but evidences the public use thereof, or perhaps the intention to improve or embellish the said plaza for the benefit of the townspeople.

xxx xxx xxx

Certain it is that the plaintiff has not proven that the Catholic Church or the parish of Victoria was the owner or proprietor of the said extensive piece of land which now forms the public plaza of said town, nor that it was in possession thereof under the form and conditions required by law, inasmuch as it has been fully proven that said plaza has been used without let or hindrance by the public and the residents of the town of Victoria ever since its creation.

Since neither the Church nor the municipality could present positive proof of ownership or exclusive possession for an appreciable period of time and the only indubitable fact is the free and continuous use of Lot 2 by the residents of Catarman,

coupled with the fact that the town has no public plaza to speak of other than this disputed parcel of land, there is a strong presumption that the same was segregated as a public plaza upon the founding of the municipality of Catarman.

The municipality, as has been heretofore noted, was declared in default with respect to Lot 1, and the default was never lifted. Indeed the amended opposition of the municipality which purported to include the eastern portion of said lot, was denied by the lower court. In any event, the municipality failed to establish its allegation with respect to the said portion of Lot 1 and to the portion of Anunciacion St. within this lot. This portion is only a path which is cemented from the corner of Mendiola St. to the monument of the Sacred Heart, and asphalted from the monument to the front of the church. There is no evidence that this path was planted to acacia trees, unlike Nalazo St. and Mendiola St., where acacia stumps were observed by the lower court. The explanation offered by Mayor Moore as to the presence of this religious monument in the middle of a public thoroughfare — that the residents of Catarman are religious — is not convincing. The statue was enthroned only in 1927, when the separation of church and state was already a confirmed legal principle. The statue was even recently improved with the construction of a platform beneath it. Its location shows that the path leading to it and to the front of the church is not an extension of Anunciacion St. but was opened mainly for the benefit of the parishioners. The eastern portion of Lot 1 itself is used for religious functions, such as the feast of Corpus Christi and the procession held on the occasion. It is admitted by the municipality that the Church does not ask for a permit whenever it uses this lot for such activities.

On the other hand, there is no evidence that the municipality uses this lot for its official activities to support its claim that this lot is a municipal plaza. The circumstance that the municipal band used to perform weekly on the "kiosko" found on this lot sometime in 1927 does not constitute an act of exclusive possession which could be the basis of a title. Moreover, the "kiosko" stood only for three years and the municipality has not adduced any evidence that it continued to use the lot after the "kiosko" was demolished.

For the foregoing reasons, the appealed decision is hereby modified in the sense that Lot 2, being a public plaza, and Nalazon St., traversing Lot 1 and Lot 2, being a public thoroughfare, are not subject to registration; and that the title of the Bishop of Calbayog with respect to the entire area of Lot 1, except the portion covered by Nalazon St., and to Lot 3, is confirmed and ordered registered in his name, as corporation sole. In all other respects the decision appealed from is affirmed. No pronouncement as to costs.

AURORA ALCANTARA-DAUS, petitioner, vs. Spouses HERMOSO and SOCORRO DE LEON, respondents.

D E C I S I O N

PANGANIBAN, J.:

While a contract of sale is perfected by mere consent, ownership of the thing sold is acquired only upon its delivery to the buyer. Upon the perfection of the sale, the seller assumes the obligation to transfer ownership and to deliver the thing sold, but the real right of ownership is transferred only by tradition or delivery thereof to the buyer.

The Case

Before us is a Petition for Review[1] under Rule 45 of the Rules of Court, seeking to set aside the February 9, 2001 Decision and the August 31, 2001 Resolution of the Court of Appeals[2](CA) in CA-GR CV No. 47587. The dispositive portion of the assailed Decision reads as follows:WHEREFORE, premises considered, the decision of the trial court is hereby REVERSED, and judgment rendered:

1. Declaring null and void and of no effect, the [D]eed of [A]bsolute [S]ale dated December 6, 1975, the [D]eed of [E]xtra-judicial [P]artition and [Q]uitclaim dated July 1, 1985, and T.C.T. No. T-31262;

2. Declaring T.C.T. No. 42238 as valid and binding;

3. Eliminating the award of P5,000.00 each to be paid to defendants-appellees.[3]

The assailed Resolution[4] denied petitioners Motion for Reconsideration.

The Facts

The antecedents of the case were summarized by the Regional Trial Court (RTC) and adopted by the CA as follows:

This is a [C]omplaint for annulment of documents and title, ownership, possession, injunction, preliminary injunction, restraining order and damages.[Respondents] alleged in their [C]omplaint that they are the owners of a parcel of land hereunder described as follows, to wit:A parcel of land (Lot No. 4786 of the Cadastral Survey of San Manuel) situated in the Municipality of San Manuel, Bounded on the NW., by Lot No. 4785; and on the SE., by Lot Nos. 11094 & 11096;

containing an area of Four Thousand Two Hundred Twelve (4,212) sq. m., more or less. Covered by Original Certificate of Title No. 22134 of the Land Records of Pangasinan.which [Respondent] Hermoso de Leon inherited from his father Marcelino de Leon by virtue of a [D]eed of [E]xtra-judicial [P]artition. Sometime in the early 1960s, [respondents] engaged the services of the late Atty. Florencio Juan to take care of the documents of the properties of his parents. Atty. Juan let them sign voluminous documents. After the death of Atty. Juan, some documents surfaced and most revealed that their properties had been conveyed by sale or quitclaim to [Respondent] Hermosos brothers and sisters, to Atty. Juan and his sisters, when in truth and in fact, no such conveyances were ever intended by them. His signature in the [D]eed of [E]xtra-judicial [P]artition with [Q]uitclaim made in favor of x x x Rodolfo de Leon was forged. They discovered that the land in question was sold by x x x Rodolfo de Leon to [Petitioner] Aurora Alcantara. They demanded annulment of the document and reconveyance but defendants refused x x x.

x x x x x x x x x[Petitioner] Aurora Alcantara-Daus [averred] that she bought the land in question in good faith and for value on December 6, 1975. [She] has been in continuous, public, peaceful, open possession over the same and has been appropriating the produce thereof without objection from anyone.[5]

On August 23, 1994, the RTC (Branch 48) of Urdaneta, Pangasinan[6] rendered its Decision[7] in favor of herein petitioner. It ruled that respondents claim was barred by laches, because more than 18 years had passed since the land was sold. It further ruled that since it was a notarial document, the Deed of Extrajudicial Partition in favor of Rodolfo de Leon was presumptively authentic.

Ruling of the Court of Appeals

In reversing the RTC, the CA held that laches did not bar respondents from pursuing their claim. Notwithstanding the delay, laches is a doctrine in equity and may not be invoked to resist the enforcement of a legal right.

The appellate court also held that since Rodolfo de Leon was not the owner of the land at the time of the sale, he could not transfer any land rights to petitioner. It further declared that the signature of Hermoso de Leon on the Deed of Extrajudicial Partition and Quitclaim -- upon which petitioner bases her claim -- was a forgery. It added that under the above circumstances, petitioner could not be said to be a buyer in good faith.

Hence, this Petition.[8]

The Issues

Petitioner raises the following issues for our consideration:

1. Whether or not the Deed of Absolute Sale dated December 6, 1975 executed by Rodolfo de Leon (deceased) over the land in question in favor of petitioner was perfected and binding upon the parties therein?2. Whether or not the evidentiary weight of the Deed of Extrajudicial Partition with Quitclaim, executed by [R]espondent Hermoso de Leon, Perlita de Leon and Carlota de Leon in favor of Rodolfo de Leon was overcome by more than [a] preponderance of evidence of respondents?3. Whether or not the possession of petitioner including her predecessor-in-interest Rodolfo de Leon over the land in question was in good faith?4. And whether or not the instant case initiated and filed by respondents on February 24, 1993 before the trial court has prescribed and respondents are guilty of laches?[9]

The Courts Ruling

The Petition has no merit.

First Issue:Validity of the Deed of Absolute Sale

Petitioner argues that, having been perfected, the Contract of Sale executed on December 6, 1975 was thus binding upon the parties thereto.

A contract of sale is consensual. It is perfected by mere consent,[10] upon a meeting of the minds[11] on the offer and the acceptance thereof based on subject matter, price and terms of payment.[12] At this stage, the sellers ownership of the thing sold is not an element in the perfection of the contract of sale.

The contract, however, creates an obligation on the part of the seller to transfer ownership and to deliver the subject matter of the contract.[13] It is during the delivery that the law requires the seller to have the right to transfer ownership of the thing sold.[14] In general, a perfected contract of sale cannot be challenged on the ground of the sellers non-ownership of the thing sold at the time of the perfection of the contract.[15]

Further, even after the contract of sale has been perfected between the parties, its consummation by delivery is yet another matter. It is through tradition or delivery that the buyer acquires the real right of ownership over the thing sold.[16]

Undisputed is the fact that at the time of the sale, Rodolfo de Leon was not the owner of the land he delivered to petitioner. Thus, the consummation of the contract and the consequent transfer of ownership would depend on whether he subsequently acquired ownership of the land in accordance with Article 1434 of the Civil Code.[17] Therefore, we need to resolve the issue of the authenticity and the due execution of the Extrajudicial Partition and Quitclaim in his favor.

Second Issue:Authenticity of the Extrajudicial Partition

Petitioner contends that the Extrajudicial Partition and Quitclaim is authentic, because it was notarized and executed in accordance with law. She claims that there is no clear and convincing evidence to set aside the presumption of regularity in the issuance of such public document. We disagree.

As a general rule, the due execution and authenticity of a document must be reasonably established before it may be admitted in evidence.[18] Notarial documents, however, may be presented in evidence without further proof of their authenticity, since the certificate of acknowledgment is prima facie evidence of the execution of the instrument or document involved.[19] To contradict facts in a notarial document and the presumption of regularity in its favor, the evidence must be clear, convincing and more than merely preponderant.[20]

The CA ruled that the signature of Hermoso de Leon on the Extrajudicial Partition and Quitclaim was forged. However, this factual finding is in conflict with that of the RTC. While normally this Court does not review factual issues,[21] this rule does not apply when there is a conflict between the holdings of the CA and those of the trial court,[22] as in the present case.

After poring over the records, we find no reason to reverse the factual finding of the appellate court. A comparison of the genuine signatures of Hermoso de Leon[23] with his purported signature on the Deed of Extrajudicial Partition with Quitclaim[24] will readily reveal that the latter is a forgery. As aptly held by the CA, such variance cannot be attributed to the age or the mechanical acts of the person signing.[25]

Without the corroborative testimony of the attesting witnesses, the lone account of the notary regarding the due execution of the Deed is insufficient to sustain the authenticity of this document. He can hardly be expected to dispute the authenticity of the very Deed he notarized.[26] For this reason, his testimony was -- as it should be --minutely scrutinized by the appellate court, and was found wanting.

Third Issue:Possession in Good Faith

Petitioner claims that her possession of the land is in good faith and that, consequently, she has acquired ownership thereof by virtue of prescription. We are not persuaded.

It is well-settled that no title to registered land in derogation of that of the registered owner shall be acquired by prescription or adverse possession.[27] Neither can prescription be allowed against the hereditary successors of the registered owner, because they merely step into the shoes of the decedent and are merely the continuation of the personality of their predecessor in interest.[28]Consequently, since a certificate of registration[29] covers it, the disputed land cannot be acquired by prescription regardless of petitioners good faith.

Fourth Issue:Prescription of Action and Laches

Petitioner also argues that the right to recover ownership has prescribed, and that respondents are guilty of laches. Again, we disagree.

Article 1141 of the New Civil Code provides that real actions over immovable properties prescribe after thirty years. This period for filing an action is interrupted when a complaint is filed in court.[30] Rodolfo de Leon alleged that the land had been allocated to him by his brother Hermoso de Leon in March 1963,[31] but that the Deed of Extrajudicial Partition assigning the contested land to the latter was executed only on September 16, 1963.[32] In any case, the Complaint to recover the land from petitioner was filed on February 24, 1993,[33]which was within the 30-year prescriptive period.

On the claim of laches, we find no reason to reverse the ruling of the CA. Laches is based upon equity and the public policy of discouraging stale claims.[34] Since laches is an equitable doctrine, its application is controlled by equitable considerations.[35] It cannot be used to defeat justice or to perpetuate fraud and injustice.[36] Thus, the assertion of laches to thwart the claim of respondents is foreclosed, because the Deed upon which petitioner bases her claim is a forgery.

WHEREFORE, the Petition is DENIED and the assailed Decision AFFIRMED. Costs against petitioner.

SO ORDERED.

Puno, (Chairman), Sandoval-Gutierrez, Corona, and Carpio-Morales, JJ., concur.

G.R. No. 155206             October 28, 2003

GOVERNMENT SERVICE INSURANCE SYSTEM, petitioner, vs.EDUARDO M. SANTIAGO, substituted by his widow ROSARIO ENRIQUEZ VDA. DE SANTIAGO,respondent.

D E C I S I O N

CALLEJO, SR., J.:

Before the Court is the petition for review on certiorari filed by the Government Service Insurance System (GSIS), seeking to reverse and set aside the Decision1 dated February 22, 2002 of the Court of Appeals (CA) in CA-G.R. CV No. 62309 and its Resolution dated September 5, 2002 denying its motion for reconsideration.

The antecedent facts of the case, as culled from the assailed CA decision and that of the trial court, are as follows:

Deceased spouses Jose C. Zulueta and Soledad Ramos obtained various loans from defendant GSIS for (the) period September, 1956 to October, 1957 in the total amount ofP3,117,000.00 secured by real estate mortgages over parcels of land covered by TCT Nos. 26105, 37177 and 50365. The Zuluetas failed to pay their loans to defendant GSIS and the latter foreclosed the real estate mortgages dated September 25, 1956, March 6, 1957, April 4, 1957 and October 15, 1957.

On August 14, 1974, the mortgaged properties were sold at public auction by defendant GSIS submitting a bid price of P5,229,927.84. Not all lots covered by the mortgaged titles, however, were sold. Ninety-one (91) lots were expressly excluded from the auction since the lots were sufficient to pay for all the mortgage debts. A Certificate of Sale (Annex "F," Records, Vol. I, pp. 23-28) was issued by then Provincial Sheriff Nicanor D. Salaysay.

The Certificate of Sale dated August 14, 1974 had been annotated and inscribed in TCT Nos. 26105, 37177 and 50356, with the following notations: "(T)he following lots which form part of this title (TCT No. 26105) are not covered by the mortgage contract due to sale to third parties and donation to the government: 50-H-5-C-9-J-65-H-8, 50-H-5-C-9J-M-7; 50-H-5-C-9-J-65-H-5; 1 lots Nos. 1 to 13, Block No. 1 –-6,138 sq.m. 2. Lots Nos. 1 to 11, Block No. 2 –4,660 sq.m. 3. Lot No. 15, Block No. 3 –487 sq.m. 4. Lot No. 17, Block No. 4 –263 sq.m. 5. Lot No. 1, Block No. 7 – 402 sq.m. 6. Road Lots Nos. 1, 2, 3, & 4 – 2,747 sq.m."

In another "NOTE: The following lots in the Antonio Subdivision were already released by the GSIS and therefore are not included in this sale, namely: LOT NO. 1, 6, 7, 8, 9, 10, and 13 (Old Plan) Block I; 1, 3, 4, 5, 7, 8 and 10 (Old Plan) Block II; 3, 10, 12 and 13 (New Plan) Block I (Old Plan) Block III; 7, 14 and 20 (New Plan) Block III (Old Plan) Block V; 13 and 20 (New Plan) Block IV (Old Plan) Block VI; 1, 2, 3 and 10 (New Plan) Block V (Old Plan) Block VII; 1, 5, 8, 15, 26 and 27 (New Plan) Block VI (Old Plan) Block VIII; 7, 12 and 20 (New Plan) Block VII (Old Plan) Block II; 1, 4 and 6 (New Plan) Block VIII (Old Plan) Block X; 5 (New Plan) Block X (Old Plan) Block ZXII; 6 (New Plan) Block XI (Old Plan) Block XII; 1, Block 9; 12 Block 1; 11 Block 2; 19 Block 1; 10 Block 6; 23 Block 3."

And the lots on "ADDITIONAL EXCLUSION FROM PUBLIC SALE" are "LOTS NO. 6 Block 4; 2 Block 2; 5 Block 5; 1, 2 and 3 Block 11, 1, 2, 3 and 4 Block 10; 5 Block 11 (New); 1 Block 3; 5 Block 1; 15 Block 7; 11 Block 9; 13 Block 5; 12 Block 5; 3 Block 10; 6."

On November 25, 1975, an Affidavit of Consolidation of Ownership (Annex "G," Records, Vol. I, pp. 29-31) was executed by defendant GSIS over Zulueta’s lots, including the lots, which as earlier stated, were already excluded from the foreclosure.

On March 6, 1980, defendant GSIS sold the foreclosed properties to Yorkstown Development Corporation which sale was disapproved by the Office of the President of the Philippines. The sold properties were returned to defendant GSIS.

The Register of Deeds of Rizal cancelled the land titles issued to Yorkstown Development Corporation. On July 2, 1980, TCT No. 23552 was issued cancelling TCT No. 21926; TCT No. 23553 cancelled TCT No. 21925; and TCT No. 23554 cancelling TCT No. 21924, all in the name of defendant GSIS.1awphi1.nét

After defendant GSIS had re-acquired the properties sold to Yorkstown Development Corporation, it began disposing the foreclosed lots including the excluded ones.

On April 7, 1990, representative Eduardo Santiago and then plaintiff Antonio Vic Zulueta executed an agreement whereby Zulueta transferred all his rights and interests over the excluded lots. Plaintiff Eduardo Santiago’s lawyer, Atty. Wenceslao B. Trinidad, wrote a demand letter dated May 11, 1989 (Annex "H," Records, Vol. I, pp. 32-33) to defendant GSIS asking for the return of the eighty-one (81) excluded lots.2

On May 7, 1990, Antonio Vic Zulueta, represented by Eduardo M. Santiago, filed with the Regional Trial Court (RTC) of Pasig City, Branch 71, a complaint for reconveyance of real estate against the GSIS. Spouses Alfeo and Nenita Escasa, Manuel III and Sylvia G. Urbano, and Marciana P. Gonzales and the heirs of Mamerto Gonzales moved to be included as intervenors and filed their respective answers in intervention. Subsequently, the petitioner, as defendant therein, filed its answer alleging inter alia that the action was barred by the statute of limitations and/or laches and that the complaint stated no cause of action. Subsequently, Zulueta was substituted by Santiago as the plaintiff in the complaint a quo. Upon the death of Santiago on March 6, 1996, he was substituted by his widow, Rosario Enriquez Vda. de Santiago, as the plaintiff.

After due trial, the RTC rendered judgment against the petitioner ordering it to reconvey to the respondent, Rosario Enriquez Vda. de Santiago, in substitution of her deceased husband Eduardo, the seventy-eight lots excluded from the foreclosure sale.1awphi1.nét The dispositive portion of the RTC decision reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiff and against the defendant:

1. Ordering defendant to reconvey to plaintiff the seventy-eight (78) lots released and excluded from the foreclosure sale including the additional exclusion from the public sale, namely:

a. Lot Nos. 1, 6, 7, 8, 0, 10, 13, Block I (Old Plan).

b. Lot Nos. 1, 3, 4, 5, 7, 8 and 10, Block II (Old Plan).

c. Lot Nos. 3, 10, 12, and 13, Block I (New Plan), Block III (Old Plan),

d. Lot Nos. 7, 14 and 20, Block III (New Plan), Block V (Old Plan).

e. Lot Nos. 13 and 20, Block IV (New Plan), Block VI (Old Plan).

f. Lot Nos. 1, 2, 3 and 10, Block V (New Plan), Block VII (Old Plan).

g. Lot Nos. 1, 5, 8, 15, 26 and 27, Block VI (New Plan), Block VIII (Old Plan).

h. Lot Nos. 7 and 12, Block VII (New Plan), Block II (Old Plan).

i. Lot Nos. 1, 4 and 6, Block VIII (New Plan), Block X (Old Plan).

j. Lot 5, Block X (New Plan), Block XII (Old Plan).

k. Lot 6, Block XI (New Plan), Block XII (Old Plan).

l. Lots 2, 5, 12 and 15, Block I.

m. Lots 6, 9 and 11, Block 2.

n. Lots 1, 5, 6, 7, 16 and 23, Block 3.

o. Lot 6, Block 4.

p. Lots 5, 12, 13 and 24, Block 5.

q. Lots 10 and 16, Block 6.

r. Lots 6 and 15, Block 7.

s. Lots 13, 24, 28 and 29, Block 8.

t. Lots 1, 11, 17 and 22, Block 9.

u. Lots 1, 2, 3 and 4, Block 10.

v. Lots 1, 2, 3 and 5 (New), Block 11.

2. Ordering defendant to pay plaintiff, if the seventy-eight (78) excluded lots could not be reconveyed, the fair market value of each of said lots.

3. Ordering the Registry of Deeds of Pasig City to cancel the land titles covering the excluded lots in the name of defendant or any of its successors-in-interest including all derivative titles therefrom and to issue new land titles in plaintiff’s name.

4. Ordering the Registry of Deeds of Pasig City to cancel the Notices of Lis Pendens inscribed in TCT No. PT-80342 under Entry No. PT-12267/T-23554; TCT No. 81812 under Entry No. PT-12267/T-23554; and TCT No. PT-84913 under Entry No. PT-12267/T-23554.

5. Costs of suit.3

The petitioner elevated the case to the CA which rendered the assailed decision affirming that of the RTC. The dispositive portion of the assailed decision reads:

WHEREFORE, premises considered, the herein appeal is DISMISSED for lack of merit. The Decision of December 17, 1997 of Branch 71 of the Regional Trial Court of Pasig City is hereby AFFIRMED.4

The petitioner moved for a reconsideration of the aforesaid decision but the same was denied in the assailed CA Resolution of September 5, 2002.

The petitioner now comes to this Court alleging that:

THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN RULING THAT A) PETITIONER WAS GUILTY OF BAD FAITH WHEN IN TRUTH AND IN FACT, THERE WAS NO SUFFICIENT GROUND TO SUPPORT SUCH CONCLUSION; AND B) THERE WAS NO PRESCRIPTION IN THIS CASE.5

In its petition, the petitioner maintains that it did not act in bad faith when it erroneously included in its certificate of sale, and subsequently consolidated the titles in its name over the seventy-eight lots ("subject lots") that were excluded from the foreclosure sale. There was no proof of bad faith nor could fraud or malice be attributed to the petitioner when it erroneously caused the issuance of certificates of title over the subject lots despite the fact that these were expressly excluded from the foreclosure sale.

The petitioner asserts that the action for reconveyance instituted by the respondent had already prescribed after the lapse of ten years from November 25, 1975 when the petitioner consolidated its ownership over the subject lots. According to the petitioner, an action for reconveyance based on implied or constructive trust prescribes in ten years from the time of its creation or upon the alleged fraudulent registration of the property. In this case, when the action was instituted on May 7, 1990, more than fourteen years had already lapsed. Thus, the petitioner contends that the same was already barred by prescription as well as laches.

The petitioner likewise takes exception to the holding of the trial court and the CA that it (the petitioner) failed to apprise or return to the Zuluetas, the respondent’s predecessors-in-interest, the seventy-eight lots excluded from the foreclosure sale because the petitioner had no such obligation under the pertinent loan and mortgage agreement.

The petitioner’s arguments fail to persuade.1awphi1.nét

At the outset, it bears emphasis that the jurisdiction of this Court in a petition for review on certiorari under Rule 45 of the Rules of Court, as amended, is limited to reviewing only errors of law. This Court is not a trier of facts. Case law has it that

the findings of the trial court especially when affirmed by the CA are binding and conclusive upon this Court. Although there are exceptions to the said rule, we find no reason to deviate therefrom.6 By assailing the findings of facts of the trial court as affirmed by the CA, that it acted in bad faith, the petitioner thereby raised questions of facts in its petition.

Nonetheless, even if we indulged the petition and delved into the factual issues, we find the petition barren of merit.

That the petitioner acted in bad faith in consolidating ownership and causing the issuance of titles in its name over the subject lots, notwithstanding that these were expressly excluded from the foreclosure sale was the uniform ruling of the trial court and appellate court. As declared by the CA:

The acts of defendant-appellant GSIS in concealing from the Zuluetas [the respondent’s predecessors-in-interest] the existence of these lots, in failing to notify or apprise the spouses Zulueta about the excluded lots from the time it consolidated its titles on their foreclosed properties in 1975, in failing to inform them when it entered into a contract of sale of the foreclosed properties to Yorkstown Development Corporation in 1980 as well as when the said sale was revoked by then President Ferdinand E. Marcos during the same year demonstrated a clear effort on its part to defraud the spouses Zulueta and appropriate for itself the subject properties. Even if titles over the lots had been issued in the name of the defendant-appellant, still it could not legally claim ownership and absolute dominion over them because indefeasibility of title under the Torrens system does not attach to titles secured by fraud or misrepresentation. The fraud committed by defendant-appellant in the form of concealment of the existence of said lots and failure to return the same to the real owners after their exclusion from the foreclosure sale made defendant-appellant holders in bad faith. It is well-settled that a holder in bad faith of a certificate of title is not entitled to the protection of the law for the law cannot be used as a shield for fraud.7

The Court agrees with the findings and conclusion of the trial court and the CA. The petitioner is not an ordinary mortgagee. It is a government financial institution and, like banks, is expected to exercise greater care and prudence in its dealings, including those involving registered lands.8 The Court’s ruling in Rural Bank of Compostela v. CA9 is apropos:

Banks, indeed, should exercise more care and prudence in dealing even with registered lands, than private individuals, for their business is one affected with public interest, keeping in trust money belonging to their depositors, which they should guard against loss by not committing any act of negligence which amounts to lack of good faith by which they would be denied the protective mantle of land registration statute, Act [No.] 496, extended only to purchasers for value and in good faith, as well as to mortgagees of the same character and description.10

Due diligence required of banks extend even to persons, or institutions like the petitioner, regularly engaged in the business of lending money secured by real estate mortgages.11

In this case, the petitioner executed an affidavit in consolidating its ownership and causing the issuance of titles in its name over the subject lots despite the fact that these were expressly excluded from the foreclosure sale. By so doing, the petitioner acted in gross and evident bad faith. It cannot feign ignorance of the fact that the subject lots were excluded from the sale at public auction. At the least, its act constituted gross negligence amounting to bad faith. Further, as found by the CA, the petitioner’s acts of concealing the existence of these lots, its failure to return them to the Zuluetas and even its attempt to sell them to a third party is proof of the petitioner’s intent to defraud the Zuluetas and appropriate for itself the subject lots.

On the issue of prescription, generally, an action for reconveyance of real property based on fraud prescribes in four years from the discovery of fraud; such discovery is deemed to have taken place upon the issuance of the certificate of title over the property. Registration of real property is a constructive notice to all persons and, thus, the four-year period shall be counted therefrom.12 On the other hand, Article 1456 of the Civil Code provides:

Art. 1456. If property is acquired through mistake or fraud, the person obtaining it is, by force of law, considered a trustee of an implied trust for the benefit of the person from whom the property comes.

An action for reconveyance based on implied or constructive trust prescribes in ten years from the alleged fraudulent registration or date of issuance of the certificate of title over the property.13

The petitioner’s defense of prescription is untenable. As held by the CA, the general rule that the discovery of fraud is deemed to have taken place upon the registration of real property because it is "considered a constructive notice to all persons" does not apply in this case. The CA correctly cited the cases of Adille v. Court of Appeals 14 and Samonte v. Court of Appeals,15 where this Court reckoned the prescriptive period for the filing of the action for reconveyance based on implied trust from the actual discovery of fraud.

In ruling that the action had not yet prescribed despite the fact that more than ten years had lapsed between the date of registration and the institution of the action for reconveyance, the Court in Adille ratiocinated:

It is true that registration under the Torrens system is constructive notice of title, but it has likewise been our holding that the Torrens title does not furnish a shield for fraud. It is therefore no argument to say that the act of registration is equivalent to notice of repudiation, assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title.

For the same reason, we cannot dismiss private respondents’ claims commenced in 1974 over the estate registered in 1955. While actions to enforce a constructive trust prescribes in ten years, reckoned from the date of the registration of the property, we, as we said, are not prepared to count the period from such a date in this case. We note the petitioner’s sub rosa efforts to get hold of the property exclusively for himself beginning with his fraudulent misrepresentation in his unilateral affidavit of extrajudicial settlement that he is "the only heir and child of his mother Feliza with the consequence that he was able to secure title in his name [alone]." Accordingly, we hold that the right of the private respondents commenced from the time they actually discovered the petitioner’s act of defraudation. According to the respondent Court of Appeals, they "came to know [of it] apparently only during the progress of the litigation." Hence, prescription is not a bar.16

The above ruling was reiterated in the more recent case of Samonte. In this case, as established by the CA, the respondent actually discovered the fraudulent act of the petitioner only in 1989:

... [T]he prescriptive period of the action is to be reckoned from the time plaintiff-appellee (then Eduardo M. Santiago) had actually discovered the fraudulent act of defendant-appellant which was, as borne out by the records, only in 1989. Plaintiff-appellee Eduardo M. Santiago categorically testified (TSN of July 11, 1995, pp. 14-15) that he came to know that there were 91 excluded lots in Antonio Village which were foreclosed by the GSIS and included in its consolidation of ownership in 1975 when, in 1989, he and Antonio Vic Zulueta discussed it and he was given by Zulueta a special power of attorney to represent him to recover the subject properties from GSIS. The complaint for reconveyance was filed barely a year from the discovery of the fraud.17

Following the Court’s pronouncements in Adille and Samonte, the institution of the action for reconveyance in the court a quo in 1990 was thus well within the prescriptive period. Having acted in bad faith in securing titles over the subject lots, the petitioner is a holder in bad faith of certificates of title over the subject lots. The petitioner is not entitled to the protection of the law for the law cannot be used as a shield for frauds.18

Contrary to its claim, the petitioner unarguably had the legal duty to return the subject lots to the Zuluetas. The petitioner’s attempts to justify its omission by insisting that it had no such duty under the mortgage contract is obviously clutching at straw. Article 22 of the Civil Code explicitly provides that "every person who, through an act of performance by another, or any other means, acquires or comes into possession of something at the expense of the latter without just or legal ground, shall return the same to him."

WHEREFORE, the petition is DENIED for lack of merit.1a\^/phi1.net The assailed Decision dated February 22, 2002 and Resolution dated September 5, 2002 of the Court of Appeals in CA-G.R. CV No. 62309 are AFFIRMED IN TOTO. Costs against the petitioner.

SO ORDERED.

REYNALDO, TELESFORO, REMEDIOS, ALFREDO and BELEN, all surnamed AGUIRRE, VICENTA, HORACIO and FLORENCIO, all surnamed MAGTIBAY and LEONILA, CECILIA, ANTONIO, and VENANCIO, all surnamed MEDRANO, and ZOSIMA QUIAMBAO,petitioners, vs. COURT OF APPEALS and ELIAS, JOSE, ARSENIA and ROGELIO, all surnamed BALITAAN, and MARIA ROSALES,respondents.

D E C I S I O N

AUSTRIA-MARTINEZ, J.:

Before us is a petition for review on certiorari under Rule 45 of the Rules of Court seeking the reversal of the Decision[1] dated July 26, 1995 rendered by the Court of Appeals in CA-G.R. CV No. 42350 which set aside the Decision[2] dated April 28, 1992 of the Regional Trial Court of Batangas City (Branch 2) in Civil Case No. 202,[3] and declared private respondents Heirs of Tiburcio Balitaan, as owners of the parcel of unregistered land with an approximate area of 1,695 square meters, located at Aplaya, Bauan, Batangas.

The facts of the case are as follows:

In his lifetime, Leocadio Medrano was the owner and possessor of a parcel of residential land, situated in Aplaya, Bauan, Batangas, containing an area of 2,611 square meters.[4] The parcel of land was conjugal property, having been acquired by Leocadio during his first marriage with one Emiliana Narito. Their union begot four children, namely: (a) Gertrudes Medrano, now deceased, represented in this case by her children, herein petitioners Telesforo, Reynaldo, Remedios, Alfredo, and Belen, all surnamed Aguirre; (b) Isabel Medrano, likewise deceased, represented by her children, herein petitioners Vicenta, Horacio, and Florencio, all surnamed Magtibay; (c) Placido Medrano, also deceased, represented by his only child, herein petitioner Zosima Quiambao; and (d) Sixto Medrano.

After the death of his first wife, Leocadio contracted a second marriage with Miguela Cario. Their union bore four children, herein co-petitioners, namely: Venancio, Leonila, Antonio and Cecilia, all surnamed Medrano.

Upon the death of Leocadio on March 19, 1945, the surviving heirs agreed that Sixto should manage and administer the subject property.

Sixto died on May 17, 1974. It was only after his death that petitioners heard rumors that Sixto had, in fact, sold significant portions of the estate of Leocadio. It appears that on September 7, 1953, Sixto, without the knowledge and consent of the petitioners, executed an Affidavit of Transfer of Real Property stating therein that he was the only heir of Leocadio.[5] Sixto declared that Leocadio died on September 16, 1949, instead of the actual date of his death on March 19, 1945. With the use of said affidavit and a survey plan,[6] Tax Declaration No. 40105 in the name of Leocadio was cancelled and Tax Declaration No. 44984 was issued in the name of Sixto.[7] On August 29, 1957, Sixto sold to Maria Bacong a 160- square meter portion of the subject land.[8] On September 28, 1959, Sixto sold to Tiburcio Balitaan a 1,695 square meter portion of the same land.[9] Sometime in November 1967, Maria Bacong sold her property to Rosendo Bacong.[10]

Petitioners demanded the reconveyance of the portions sold by Sixto but Tiburcio Balitaan, Maria Bacong and Rosendo Bacong refused to do so. Hence, petitioners filed against them before the Regional Trial Court of Batangas (Branch 2), a complaint for Declaration of Nullity of Documents, Partition, Malicious Prosecution and Damages, docketed as Civil Case No. 202.[11]

In their Answer, Maria Bacong and Rosendo Bacong contend that petitioners have no cause of action because they acquired their property thru a valid deed of sale dated August 29, 1957, executed by Sixto and, alternatively, petitioners cause of action, if any, was barred by prescription and laches.[12]

In his Answer, Tiburcio Balitaan contends that petitioners have no cause of action since petitioners were well-aware of the sale of the property to him by Sixto; and that he was an innocent purchaser for value, in possession and enjoyment of the land in the concept of absolute owner, peacefully and publicly. He further echoed the contention of Maria and Rosendo Bacong that any cause of action petitioners may have was barred by prescription and laches.[13]

Maria Bacong died during the pendency of the suit in the trial court and she was substituted by her surviving heirs, namely, Lorenza, Elena, Felipa, Manuel, Marilou, Ricardo, Medel, Monchito and Milag, all surnamed Medrano.[14] Tiburcio Balitaan also died and was substituted by his heirs, herein private respondents, namely: his wife, Maria Rosales and their four children: Elias, Jose, Arsenia and Rogelio, all surnamed Balitaan.[15]

On July 28, 1989, petitioners and Rosendo Bacong, for himself and as attorney-in-fact of the heirs of Maria Bacong, entered into a compromise agreement to settle the case between them.[16] The compromise agreement, as approved by the trial court, provided that Rosendo Bacong and the heirs of Maria Bacong agreed to pay P30,000.00 to petitioners in recognition of petitioners ownership of a 269-square meter portion[17] and in consideration of which, petitioners recognized the full ownership, rights, interest and participation of the former over said land.[18] The area of the subject land is thus reduced to 2,342 square meters (2,611 square meters minus 269 square meters).

After trial on the merits, the trial court rendered judgment dated April 28, 1992, ruling that private respondents did not dispute, by any evidence, the falsity of the Affidavit of Transfer, as well as the fact that Sixto had co-owners to the property. It found that private respondents affirmative defense of laches and/or prescription are unavailing against a property held in co-ownership as long as the state of co-ownership is recognized. Consequently, the trial court upheld the sale made by Sixto in favor of private respondents only to the extent that Sixto is entitled to by virtue of his being a co-owner.[19]

In determining the area that Sixto could have validly sold to private respondents, the trial court, in its decision, provided for the manner of partition among the parties, based on the memorandum submitted by petitioners, thus:For the four (4) children of the first marriage, namely:

(1) Gertrudes, who is already dead represented by her children Tefesforo, Reynaldo, Remedios, Alfredo and Belen, all surnamed Aguirre 399.42 square meters;

(2) Isabel Medrano, who is already dead, represented by the plaintiffs, her children Vicenta, Horacio and Florencio, all surnamed Magtibay 399.42 square meters;

(3) Placido Medrano (dead), represented by his only child Zosima Medrano 399.42 square meters; and

(4) Sixto Medrano 399.42 square meters only which he had the right to dispose of in favor of Tiburcio Balitaan and Maria Rosales.

The above consist of undivided interest, shares and participations from the inheritance or succession to the conjugal estate of Leocadio Medrano and Emiliana Narito.For the children of the second marriage their shares in the inheritance from the property of Leocadio Medrano are as follows:(1) To Venancio Medrano - 138.32 square meters(2) To Leonila Medrano - 138.32 square meters(3) To Antonio Medrano - 138.32 square meters(4) To Cecilia Medrano - 138.32 square meterswith all the above consisting of undivided shares, interest and participation in the estate.For the defendants Maria Rosales, surviving spouse of the deceased Tiburcio Balitaan and their Children, an area of 399.42 square meters, the only area and extent which Sixto Medrano could have legally dispensed of in their favor.[20]

Thus, the dispositive portion of the trial courts decision reads as follows:

WHEREFORE, in view of the foregoing, the Court renders judgment in favor of the plaintiffs and against the defendants, to wit:(a) Ordering the partition of the property in question among the plaintiffs and the defendants; and(b) Ordering the parties, plaintiffs and defendants, to make a partition among themselves by proper instruments of conveyance and to submit before this Court a project of partition should the parties be able to agree for the confirmation of the Court within two (2) months upon receipt of this decision, otherwise this Court will be constrained to appoint commissioners to make the partition in accordance with law.All other claims not having been duly proved are ordered dismissed.SO ORDERED.[21]

Aggrieved, private respondents appealed to the Court of Appeals.[22]

On July 26, 1995, the appellate court rendered judgment recognizing the validity of the sale only with respect to the undivided share of Sixto Medrano as co-owner; but nonetheless, declaring respondents as absolute owners of 1,695 square meters of the subject property, reasoning that:

. . . Defendants-appellees have been in possession, in the concept of owner, of the entire parcel of land sold to Tiburcio Balitaan by Sixto Medrano for more than ten years, seventeen years to be exact (1958-1975). Relying on the affidavit of transfer (Exhibit B) the tax declaration (Exhibit C)

and the survey plan (Exhibit D) shown to him by Sixto Medrano which indicate the latter as owner of the property in dispute, Tiburcio Balitaan believed transfer to him was effected. (TSN, April 17, 1991, pp. 14-17) and thus, entered the property as owner (Ibid. at p. 13) Tiburcio Balitaan, believing himself as the lawful transferee, in addition, caused Tax Declaration No. 51038 to be issued in his name (Exhibits 6, 6-A, 6-B, and 6-C). Thus, although the sale of the co-owned property is only valid as to the undivided share of Sixto Medrano, defendants, by virtue of their open, adverse and uninterrupted possession from 1958 (Exhibit G) to 1975, obtained title to the entire property and not just Sixtos undivided share. This is pursuant to Article 1134 (1957a) of the New Civil Code which provides that:Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years.. . .Plaintiffs did not at all inquire as to the status of their property all this time and thus have been remiss of their duties as owners of the property. Plaintiffs waited until Sixtos death to learn more about their property. Even though the co-ownership is to be preserved in accordance with the wishes of the deceased, the plaintiffs should have taken it upon themselves to look into the status of the property once in a while, to assure themselves that it is managed well and that they are receiving what is due them as co-owners of the parcel of land or to at least manifest their continued interest in the property as normal owners would do. But the plaintiffs did not show any interest in the way Sixto Medrano was managing the property which in effect gave the latter carte blanche powers over the same. Such passivity is aggravated by the fact that one of the plaintiffs resides a mere 600 meters away from the disputed property (TSN, April 17, 1991, p. 13). By not showing any interest, the plaintiffs have, in fact, slept on their rights and thus, cannot now exercise a stale right.[23]

Petitioners sought reconsideration[24] but the appellate court denied it in a Resolution dated October 5, 1995.[25]

In their present recourse, petitioners take exception from the appellate courts findings that respondents have been in possession, in the concept of owner of the entire parcel of land sold to Tiburcio Balitaan by Sixto Medrano for seventeen years (1958-1975), relying on the Affidavit of Transfer and Tax Declaration No. 51038 in the name of Sixto; and that Tiburcio acquired ownership of the whole property from Sixto through ordinary prescription for ten years.

Petitioners submit that Tiburcio Balitaan was not a purchaser in good faith and for value since there are enough circumstances which should have put him on guard and prompted him to be more circumspect and inquire further about the true status of Sixto Medranos ownership; that during his lifetime, Tiburcio was a neighbor of petitioners and was well-aware that Sixto had other siblings but Tiburcio chose to rely on the Affidavit of Transfer executed by Sixto Medrano declaring that he was the only heir of Leocadio; that the Court of Appeals should not have faulted them for failing to inquire about the status of the disputed property until after the death of Sixto Medrano; that they are not guilty of laches.

It is settled that in the exercise of the Supreme Courts power of review, the findings of facts of the Court of Appeals are conclusive and binding on the Supreme Court.[26] The exceptions to this rule are: (1) when the findings are grounded entirely on speculation, surmises or conjectures; (2) when the inference made is manifestly mistaken, absurd or impossible; (3) when there is grave

abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the findings of fact are conflicting; (6) when in making its findings the Court of Appeals went beyond the issues of the case, or its findings are contrary to the admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in the petition as well as in the petitioners main and reply briefs are not disputed by the respondent; (10) when the findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and (11) when the Court of Appeals manifestly overlooked certain relevant facts not disputed by the parties, which, if properly considered, would justify a different conclusion.[27] Exceptions (4), (7), (10) and (11) are present in the instant case.

We find the petition meritorious.[28] We agree with the petitioners that the Court of Appeals committed a reversible error in upholding the claim of petitioners that they acquired ownership of the subject property through prescription.

Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time fixed by law;[29] without good faith and just title, acquisitive prescription can only be extraordinary in character. Regarding real or immovable property, ordinary acquisitive prescription requires a period of possession of ten years,[30] while extraordinary acquisitive prescription requires an uninterrupted adverse possession of thirty years.[31]

Ordinary acquisitive prescription demands that possession be in good faith, which consists in the reasonable belief that the person from whom the thing is received has been the owner thereof and could thereby transmit that ownership.[32] There is just title when the adverse claimant comes into possession of the property through any of the modes recognized by law for the acquisition of ownership or other real rights, but that the grantor is neither the owner nor in a position to transmit the right.[33]

Article 1130 of the Civil Code states that the title for prescription must be true and valid. In Doliendo vs. Biarnesa,[34] we elucidated on this provision, thus:

We think that this contention is based on a misconception of the scope and effect of the provisions of this article of the Code in its application to ordinary prescription. It is evident that by a titulo verdadero y valido in this connection we are not to understand a titulo que por si solo tiene fuerza de transferir el dominio sin necesidad de la prescricion (a title which of itself is sufficient to transfer the ownership without the necessity of the lapse of the prescription period); and we accept the opinion of a learned Spanish law writer who holds that the titulo verdadero y valido as used in this article of the code prescribes a titulo Colorado and not merely putativo; a titulo Colorado being one which a person has when he buys a thing, in good faith, from one whom he believes to be the owner, and a titulo putativo being one which is supposed to have preceded the acquisition of a thing, although in fact it did not, as might happen when one is in possession of a thing in the belief that it had been bequeathed to him. (Viso Derecho Civil, Parte Segunda, p. 541)[35]

The requirements for ordinary acquisitive prescription as hereinabove described have not been met in this case.

It must be remembered that the burden of proving the status of a purchaser in good faith lies upon him who asserts that status. It is not sufficient to invoke the ordinary presumption of good faith, that is, that everyone is presumed to have acted in good faith, since the good faith that is here essential is integral with the very status that must be established.[36]

After a careful examination of the records, we find that private respondents failed to discharge the burden of proof that Tiburcio Balitaan was a purchaser in good faith. It is undisputed that Tiburcio practically lived his entire lifetime in the area where the property in dispute is located and had been a neighbor of petitioners. He knew that Sixto Medrano had other siblings because his son, Dr. Elias Balitaan, is the godson by baptism of spouses Jose Aguirre and Gertrudes Medrano, the latter being a deceased sister of Sixto. Thus, Tiburcio was not a complete stranger to the Medrano clan. Yet, he deliberately chose to close his eyes to said facts and despite his personal knowledge to the contrary, he purchased the disputed property from Sixto on the basis of the misrepresentation of the latter in his Affidavit of Transfer that he is the sole surviving heir of Leocadio. A purchaser cannot close his eyes to facts which should put a reasonable man upon his guard, and then claim that he acted in good faith under the belief that there was no defect in the title of the vendor.[37]

Since the disputed property is an unregistered land, Tiburcio as buyer thereof did so at his peril. Private respondents claim that Tiburcio bought the land in good faith, that is, without notice that some other person has a right to or interest in the property, would not protect them if it turns out, as it actually did in this case, that the seller, Sixto Medrano, did not own the entire property at the time of the sale, but only an undivided portion of the land as a co-owner. Private respondents failed to show that the petitioners were notified of the subject sale or that respondents gave their consent to the sale. Not being in good faith, the ten-year period required for ordinary acquisitive prescription does not apply.

Even the thirty-year period under extraordinary acquisitive prescription has not been met in this case. Private respondents claim to have been in possession, in the concept of owner, of the entire parcel of land sold to Tiburcio Balitaan by Sixto Medrano for only seventeen years (1958-1975).

In addition, as we have enunciated in Salvador vs. Court of Appeals,[38] to wit:

This Court has held that the possession of a co-owner is like that of a trustee and shall not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. Acts which may be considered adverse to strangers may not be considered adverse insofar as co-owners are concerned. A mere silent possession by a co-owner, his receipt of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear and convincing evidence that he exercised acts of possession which unequivocably constituted an ouster or deprivation of the rights of the other co-owners.Thus, in order that a co-owners possession may be deemed adverse to the cestui que trust or the other co-owners, the following elements must concur: (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or the other co-owners; (2) that such positive acts of repudiation have been made known to thecestui

que trust or the other co-owners; and (3) that the evidence thereon must be clear and convincing.[39] (Emphasis supplied)

Tested against these guidelines, respondents failed to present competent evidence that the acts of Sixto adversely and clearly repudiated the existing co-ownership among the heirs of Leocadio Medrano.

Private respondents reliance on the tax declaration in the name of Sixto Medrano is unworthy of credit since we have held on several occasions that tax declarations by themselves do not conclusively prove title to land.[40] Further, private respondents failed to show that the Affidavit executed by Sixto to the effect that he is the sole owner of the subject property was known or made known to the other co-heirs of Leocadio Medrano.

Neither can we subscribe to the appellate courts view that petitioners are guilty of laches. Laches is the negligence or omission to assert a right within a reasonable time, warranting a presumption that the party entitled to assert it has abandoned it or declined to assert it. [41] It does not involve mere lapse or passage of time, but is principally an impediment to the assertion or enforcement of a right, which has become under the circumstances inequitable or unfair to permit.[42] The rule that each co-owner may demand at any time the partition of the common property implies that an action to demand partition is imprescriptible or cannot be barred by laches.[43]

We have consistently held that if a co-owner sells the whole property as his, the sale will affect only his own share but not those of the other co-owners who did not consent to the sale.[44] Article 493 of the Civil Code provides:

Art. 493. Each co-owner shall have the full ownership of his part and the fruits and benefits pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in the division upon the termination of the co-ownership.

It clearly provides that the sale or other disposition affects only the sellers share pro indiviso, and the transferee gets only what corresponds to his grantors share in the partition of the property owned in common. Since a co-owner is entitled to sell his undivided share, a sale of the entire property by one co-owner without the consent of the other co-owners is not null and void; only the rights of the co-owner/seller are transferred, thereby making the buyer a co-owner of the property.[45] Accordingly, we held in Bailon-Casilao vs. Court of Appeals:From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a sale of the entire property by one-co-owner without the consent of the other co-owners is not null and void. However, only the rights of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.The proper action in cases like this is not for the nullification of the sale or for the recovery of possession of the thing owned in common from the third person who substituted the co-owner or co-owners who alienated their shares, but the DIVISION of the common property as if it continued to remain in the possession of the co-owners who possessed and administered it[Mainit v. Bandoy, supra].

Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery of possession nor restitution can be granted since the defendant buyers are legitimate proprietors and possessors in joint ownership of the common property claimed [Ramirez v. Bautista, supra].[46]

It is clear therefore that the deed of sale executed by Sixto Medrano in favor of Tiburcio Balitaan is a valid conveyance only insofar as the share of Sixto Medrano in the co-ownership is concerned. Thus, the respondent court erred in declaring the ownership of the entire 1,695-square meter property sold by Sixto, in favor of the private respondents.

The next question is what is the area of the pro indiviso share pertaining to Sixto Medrano that was sold to private respondents? The trial court endeavored to determine the same by ascertaining the inheritance of each of the heirs of Leocadio. However, the manner of partition as set out by the trial court in the text of its decision needs to be amended so as to conform to the laws on intestate succession under the Old Civil Code absent any allegation or showing that Leocadio left any last will and testament.

It is not disputed that the 2,342-square meter property was a conjugal property of Leocadio and Emiliana. Upon the death of Emiliana, which occurred many years before the death of Leocadio in 1945, both deaths occurring before the enactment of the New Civil Code in 1950, all the four children of the first marriage and the four children of the second marriage shall share equally. The subject property should have been divided into eight equal parts, pursuant to Articles 921 and 931 of the old Civil Code,[47] or 292.75 square meters each.The respective heirs of the now deceased children of Leocadio inherit by way of representation the respective shares of their respective parents, pursuant to Articles 933 and 934 of the Old Civil Code.[48]

At the time of death of Leocadio in 1945, Miguela was entitled only to the usufruct of the land pursuant to Article 834 of the Old Civil Code,[49] which provides that [i]f only one legitimate child or descendant survives, the widower or widow shall have the usufruct of the third available for betterment, such child or descendant to have the naked ownership until, on the death of the surviving spouse, the whole title is merged in him.

Thus, to recapitulate, each of the heirs of Leocadio should inherit 292.75 square meters, pro-indiviso (2,342 square meters 8 = 292.75 square meters) after deducting from the original 2,611 square meters of the subject property the 269 square meters ceded to the heirs of Maria Bacong in a compromise agreement among the petitioners and the heirs of Maria Bacong. The deceased children of Leocadio are represented by their respective heirs by right of representation under Articles 933 and 934 of the Old Civil Code.

Accordingly, the undivided shares of Leocadios eight children or their heirs by right of representation, upon the death of Leocadio in 1945 are as follows:

(1) Venancio Medrano - 292.75 square meters(2) Leonila Medrano - 292.75 square meters(3) Antonio Medrano - 292.75 square meters

(4) Cecilia Medrano - 292.75 square meters(5) Heirs of Gertrudes M. Aguirre, Telesforo, Reynaldo, Remedios, Alfredo and Belen, all surnamed Aguirre- - 292.75 square meters(6) Heirs of Isabel M. Magtibay, Vicenta, Horacio and Florencio, all surnamed Magtibay - 292.75 square meters(7) Heirs of Placido Medrano, plaintiff Zosima Medrano Quimbao - 292.75 square meters(8) Sixto Medrano - 292.75 square meters

During the pendency of the case in the trial court but after the death of Sixto, petitioners sold 460 square meters to one Mateo Castillo. Consequently, the 460 square meters should be charged against the shares of petitioners only and should not affect the 292.75 square meters undivided share of Sixto Medrano which he had sold in 1959.[50] Accordingly, 460 square meters divided by 7 equals 65.71 square meters. Deducting said area from 292.75 square meters, the final undivided share of each of the seven heirs of Leocadio should be 227.04 square meters (292.75 - 65.71 = 227.04) and that pertaining to Sixto in 292.75 square meters.

Thus, the manner of partition set forth by the trial court in its decision should be amended, as follows:(1) Gertrudes M. Aguirre, deceased, represented by her children, herein petitioners Telesforo, Reynaldo, Remedios, Alfredo and Belen, all surnamed Aguirre - 227.04 square meters(2) Isabel M. Magtibay, deceased, represented by her children, herein petitioners Vicenta, Horacio and Florencio, all surnamed Magtibay -227.04 square meters(3) Placido Medrano, deceased, represented by his only child, Placido Medrano - 227.04 square meters(4) Private respondents Maria Rosales and heirs of Tiburcio Balitaan, namely: Elias, Jose, Arsenia and Rogelio all surnamed Balitaan (in lieu of Sixto Medrano) - 292.75 square meters

(5) Venancio Medrano - 227.04 square meters(6) Leonila Medrano - 227.04 square meters(7) Antonio Medrano - 227.04 square meters(8) Cecilia Medrano - 227.04 square meters(9) Rosendo Bacong - 269 square meters(10) Mateo Castillo - 460 square meters

WHEREFORE, we GRANT the petition. The assailed decision of the Court of Appeals in CA-G.R. CV No. 42350, dated July 26, 1995, isREVERSED and SET ASIDE. The decision of the Regional Trial Court is REINSTATED with the following MODIFICATIONS:

The sale in favor of private respondents is declared VALID but only insofar as the 292.75 square meters undivided share of Sixto Medrano in the subject property is concerned.

Let the parcel of land, located at Aplaya, Bauan, Batangas, consisting of 2,611 square meters, be partitioned and distributed as determined by the Court in the text of herein decision. Accordingly, let the records of the case be remanded to the Regional Trial Court of Batangas City (Branch 2) in Civil Case No. 202 for further appropriate proceedings under Rule 69 of the Rules of Court.

No pronouncement as to costs.

SO ORDERED.

SOLEDAD CALICDAN, represented by her guardian GUADALUPE CASTILLO, petitioner, vs. SILVERIO CENDAA, substituted by his legal heir CELSA CENDAA-ALARAS, respondent.

D E C I S I O N

YNARES-SANTIAGO, J.:

This petition for review seeks the reversal of the April 4, 2002 decision of the Court of Appeals in CA-G.R. CV No. 67266,[1] which set aside the November 12, 1996 decision of the Regional Trial Court of Dagupan City, Branch 44 in Civil Case No. D-10270.[2]

The instant controversy involves a 760 square meter parcel of unregistered land located in Poblacion, Mangaldan, Pangasinan. The land was formerly owned by Sixto Calicdan, who died intestate on November 4, 1941. He was survived by his wife, Fermina, and three children, namely, petitioner Soledad, Jose and Benigno, all surnamed Calicdan.[3]

On August 25, 1947, Fermina executed a deed of donation inter vivos whereby she conveyed the land to respondent Silverio Cendaa,[4]who immediately entered into possession of the land, built a fence around the land and constructed a two-storey residential house thereon sometime in 1949, where he resided until his death in 1998.[5]

On June 29, 1992, petitioner, through her legal guardian Guadalupe Castillo, filed a complaint for Recovery of Ownership, Possession and Damages against the respondent, alleging that the donation was void; that respondent took advantage of her incompetence in acquiring the land; and that she merely tolerated respondents possession of the land as well as the construction of his house thereon.[6]

In his Answer with Motion to Dismiss, respondent alleged, by way of affirmative defenses, that the land was donated to him by Fermina in 1947; and that he had been publicly, peacefully, continuously, and adversely in possession of the land for a period of 45 years.Moreover, he argued that the complaint was barred by prior judgment in the special proceedings for the Inventory of Properties of Incompetent Soledad Calicdan, where the court decreed the exclusion of the land from the inventory of properties of the petitioner.[7]

On November 12, 1996, the trial court rendered a decision in favor of the petitioner, the dispositive portion of which reads as follows:

WHEREFORE, judgment is rendered in favor of plaintiff and against the defendant as follows:1. Ordering defendant Silverio Cendaa to vacate the land in question and surrender ownership and possession of the same to plaintiff; and2. Ordering defendant to pay plaintiff P20,000.00 as moral damages, P20,000.00 as exemplary damages, P10,000.00 by way of attorneys fees and other litigation expenses, plus cost of suit.SO ORDERED.[8]

On appeal by the respondent, the Court of Appeals reversed the trial courts decision and declared that the donation was valid.Furthermore, it held that petitioner lost her ownership of the property by prescription.

Hence, the instant petition for review on the following issues:(1) whether or not the donation inter vivos is valid; and(2) whether or not petitioner lost ownership of the land by prescription.

As a rule, our jurisdiction in cases brought from the Court of Appeals is limited to the review and revision of errors of law allegedly committed by the appellate court. This is because its findings of fact are deemed conclusive and we are not duty-bound to analyze and weigh all over again the evidence already considered in the proceedings below.[9]

The rule, however, admits of the following exceptions:

(1) when the findings are grounded on speculation, surmises or conjectures;(2) when the inference made is manifestly mistaken, absurd or impossible;(3) when there is grave abuse of discretion in the appreciation of facts;(4) when the factual findings of the trial and appellate courts are conflicting;(5) when the Court of Appeals, in making its findings, has gone beyond the issues of the case and such findings are contrary to the admissions of both appellant and appellee;(6) when the judgment of the appellate court is premised on a misapprehension of facts or when it has failed to consider certain relevant facts which, if properly taken into account, will justify a different conclusion;(7) when the findings of fact are conclusions without citation of specific evidence upon which they are based; and(8) when findings of fact of the Court of Appeals are premised on the absence of evidence but are contradicted by the evidence on record.[10]

In the case at bar, the factual findings of the trial court and the Court of Appeals are conflicting; thus, we are constrained to review the findings of facts.

The trial court found the donation of the land void because Fermina was not the owner thereof, considering that it was inherited by Sixto from his parents. Thus, the land was not part of the conjugal property of the spouses Sixto and Fermina Calicdan, because under the Spanish Civil Code, the law applicable when Sixto died in 1941, the surviving spouse had a right of usufruct only over the estate of the deceased spouse. Consequently, respondent, who derived his rights from Fermina, only acquired the right of usufruct as it was the only right which the latter could convey.

After a review of the evidence on record, we find that the Court of Appeals ruling that the donation was valid was not supported by convincing proof. Respondent himself admitted during the cross examination that he had no personal knowledge of whether Sixto Calicdan in fact purchased the subject land from Felomino Bautista. Pertinent portions of his testimony read:

Q. And Sixto Calicdan inherited this property from his parents?

A. No, sir.

Q. What do you mean by no?

A. To my knowledge and information, Sixto Calicdan bought the property from his cousin, I think Flaviano or Felomino Bautista.

Q. So, in other words, you have no personal knowledge about how Sixto Calicdan acquired this property?

A. I think it was by purchase.

Q. According to information, so you have no actual personal knowledge how Sixto Calicadan acquired this property?

A. Yes, because when the property was bought by my uncle, I was not yet born, so information only.

Q. So when you were born, you came to know already that Sixto Calicdan is the owner of this property?

A. Yes, thru the son of Felomino Bautista who is now, I think, in Baguio.

Q. You have not seen any document to show that Sixto Calicdan purchased the property from one Felomino Bautista?

A. None, sir.[11]

In People v. Guittap,[12] we held that:

Under Rule 130, Section 36 of the Rules of Court, a witness can testify only to those facts which he knows of his own personal knowledge, i.e., which are derived from his own perception; otherwise, such testimony would be hearsay. Hearsay evidence is defined as evidence not of what the witness knows himself but of what he has heard from others. The hearsay rule bars the testimony of a witness who merely recites what someone else has told him, whether orally or in writing. In Sanvicente v. People, we held that when evidence is based on what was supposedly told the witness, the same is without any evidentiary weight for being patently hearsay. Familiar and fundamental is the rule that hearsay testimony is inadmissible as evidence.

The Court of Appeals thus erred in ruling based on respondents bare hearsay testimony as evidence of the donation made by Fermina.

Notwithstanding the invalidity of the donation, we find that respondent has become the rightful owner of the land by extraordinary acquisitive prescription.

Prescription is another mode of acquiring ownership and other real rights over immovable property. It is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse. Acquisitive prescription is either ordinary or extraordinary. Ordinary acquisitive prescription requires possession in good faith and with just title for ten years. In extraordinary prescription ownership and other real rights over immovable property are acquired through uninterrupted adverse possession thereof for thirty years without need of title or of good faith.[13]

The good faith of the possessor consists in the reasonable belief that the person from whom he received the thing was the owner thereof, and could transmit his ownership.[14] For purposes of prescription, there is just title when the adverse claimant came into possession of the property through one of the modes recognized by law for the acquisition of ownership or other real rights, but the grantor was not the owner or could not transmit any right.[15]

Assuming arguendo that ordinary acquisitive prescription is unavailing in the case at bar as it demands that the possession be in good faith and with just title,[16] and there is no evidence on record to prove respondents good faith, nevertheless, his adverse possession of the land for more than 45 years aptly shows that he has met the requirements for extraordinary acquisitive prescription to set in.

The records show that the subject land is an unregistered land. When the petitioner filed the instant case on June 29, 1992, respondent was in possession of the land for 45 years counted from the time of the donation in 1947. This is more than the required 30 years of uninterrupted adverse possession without just title and good faith. Such possession was public, adverse and in the concept of an owner. Respondent fenced the land and built his house in 1949, with the help of Guadalupes father as his contractor. His act of cultivating and reaping the fruits of the land was manifest and visible to all. He declared the land for taxation purposes and religiously paid the realty taxes thereon.[17] Together with his actual possession of the land, these tax declarations constitute strong evidence of ownership of the land occupied by him. As we said in the case of Heirs of Simplicio Santiago v. Heirs of Mariano Santiago:[18]

Although tax declarations or realty tax payment of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner, for no one in his right mind would be paying taxes for a property that is not in his actual or constructive possession. They constitute at least proof that the holder has a claim of title over the property.The voluntary declaration of a piece of property for taxation purposes manifests not only ones sincere and honest desire to obtain title to the property and announces his adverse claim against the State and all other interested parties, but also the intention to contribute needed revenues to the Government. Such an act strengthens ones bona fide claim of acquisition of ownership.

Moreover, the deed of donation inter vivos, albeit void for having been executed by one who was not the owner of the property donated, may still be used to show the exclusive and adverse character of respondents possession. Thus, in Heirs of Segunda Maningding v. Court of Appeals,[19] we held:

Even assuming that the donation propter nuptias is void for failure to comply with formal requisites, it could still constitute a legal basis for adverse possession. With clear and convincing evidence of possession, a private document of donation may serve as basis for a claim of ownership. In Pensader v. Pensader we ruled that while the verbal donation under which the

defendant and his predecessors-in-interest have been in possession of the lands in question is not effective as a transfer of title,  still it is a circumstance which may explain the adverse and exclusive character of the possession. (Underscoring ours)

In sum, the Court of Appeals correctly ordered the dismissal of Civil Case No. D-10270 before the Regional Trial Court of Dagupan City, Branch 44, and declared respondent the rightful owner of the subject property, not on the basis of the Deed of Donation Inter Vivos, which is hereby declared void, but on extraordinary acquisitive prescription.

WHEREFORE, in view of the foregoing, the petition is DENIED. The Decision of the Court of Appeals dated April 4, 2002 in CA-G.R. CV No. 67266, which ordered the dismissal of Civil Case No. D-10270 before the Regional Trial Court of Dagupan City, Branch 44, is AFFIRMED.

SO ORDERED.

SPOUSES IGNACIO PALOMO and TRINIDAD PASCUAL, and CARMEN PALOMO VDA. DE BUENAVENTURA, petitioners, vs. THE HONORABLE COURT OF APPEALS, THE REPUBLIC OF THE PHILIPPINES, FAUSTINO J. PERFECTO, RAFFY SANTILLAN, BOY ARIADO, LORENZO BROCALES, SALVADOR DOE, and other DOES, respondents.

D E C I S I O N

ROMERO, J.:

The issue in the case at bar pertains to ownership of 15 parcels of land in Tiwi, Albay which form part of the "Tiwi Hot Spring National Park." The facts of the case are as follows.

On June 13, 1913, then Governor General of the Philippine Islands, William Cameron Forbes issued Executive Order No. 40 which reserved for provincial park purposes some 440,530 square meters of land situated in Barrio Naga, Municipality of Tiwi, Province of Albay pursuant to the provisions of Act 648 of the Philippine Commission.[1]

Subsequently, the then Court of First Instance of Albay, 15th Judicial District, United States of America, ordered the registration of 15 parcels of land covered by Executive Order No. 40 in the name of Diego Palomo on December 9, 1916; [2] December 28, 1916;[3] and January 17, 1917.[4] Diego Palomo donated these parcels of land consisting of 74,872 square meters which were allegedly covered by Original Certificates of Title Nos. 513, 169, 176 and 173[5] to his heirs, herein petitioners, Ignacio and Carmen Palomo two months before his death in April 1937.[6]

Claiming that the aforesaid original certificates of title were lost during the Japanese occupation, Ignacio Palomo filed a petition for reconstitution with the Court of First Instance of Albay on May 30, 1950.[7] The Register of Deeds of Albay issued Transfer Certificates of Title Nos. 3911, 3912, 3913 and 3914 sometime in October 1953.[8]

On July 10, 1954 President Ramon Magsaysay issued Proclamation No. 47 converting the area embraced by Executive Order No. 40 into the "Tiwi Hot Spring National Park," under the control, management, protection and administration of the defunct Commission of Parks and Wildlife, now a division of the Bureau of Forest Development. The area was never released as alienable and disposable portion of the public domain and, therefore, is neither susceptible to disposition under the provisions of the Public Land Law (CA 141) nor registrable under the Land Registration Act (Act No. 496).

The Palomos, however, continued in possession of the property, paid real estate taxes thereon[9] and introduced improvements by planting rice, bananas, pandan and coconuts. On April 8, 1971, petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual mortgaged the parcels of land covered by TCT 3911, 3912, 3913 and 3914 to guarantee a loan of P200,000 from the Bank of the Philippine Islands.

In May 7, 1974 petitioner Carmen vda. de Buenaventura and spouses Ignacio Palomo and Trinidad Pascual filed Civil Case No. T-143 before the then Court of First Instance of Albay for Injunction with damages against private respondents Faustino J. Perfecto, Raffy Santillan, Boy Ariado, Lorenzo Brocales, Salvador Doe and other Does who are all employees of the Bureau of

Forest Development who entered the land covered by TCT No. 3913 and/or TCT 3914 and cut down bamboos thereat, totally leveling no less than 4 groves worth not less than P2,000.00.

On October 11, 1974, the Republic of the Philippines filed Civil Case No. T-176 for annulment and cancellation of Certificates of Title involving the 15 parcels of land registered in the name of the petitioners and subject of Civil Case T-143. Impleaded with the petitioners as defendants were the Bank of the Philippine Islands, Legazpi Branch and the Register of Deeds of Albay.

The case against the Bank of Philippine Islands was dismissed because the loan of P200,000 with the Bank was already paid and the mortgage in its favor cancelled.

A joint trial of Civil Case T-143 and T-176 was conducted upon agreement of the parties and on July 31, 1986, the trial court rendered the following decision:"WHEREFORE, premises considered, judgment is hereby rendered:IN CIVIL CASE No. T-143, in favor of the defendants and against the plaintiffs, dismissing the complaint for injunction and damages, as it is hereby DISMISSED.Costs against the plaintiffs.In CIVIL CASE No. T-176, in favor of the plaintiffs and against the defendants:(1) Declaring null and void and no force and effect the Order dated September 14, 1953, as well as the Original Certificate of Titles Nos. 153,[10] 169, 173 and 176 and Transfer Certificates of Titles Nos. 3911, T-3912, T-3913, and T-3914, all of the Register of Deeds of Albay and all transactions based on said titles.(2) Forfeiting in favor of the plaintiff Government any and all improvements on the lands in question that are found therein and introduced by the defendants;(3) Declaring Lot Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11 and 12, Plan II-9299 and Lots 1, 21,[11] 3 and 4 of Plan II-9205 as part of the Tiwi Hot Spring National Park;(4) and Finally, the Register of Deeds of Albay is hereby ordered to cancel the alleged Original Certificates of Titles Nos. 513, 169, 173 and 176, Transfer Certificates of Title Nos. T-3911, T-3912, T-3913 and T-3914.Costs against the defendants.So Ordered."[12]

The court a quo in ruling for the Republic found no sufficient proof that the Palomos have established property rights over the parcels of land in question before the Treaty of Paris which ended the Spanish-American War at the end of the century. The court further stated that assuming that the decrees of the Court of First Instance of Albay were really issued, the Palomos obtained no right at all over the Properties because these were issued only when Executive Order No. 40 was already in force. At this point, we take note that although the Geodetic Engineer of the Bureau of Lands appointed as one of the Commissioners in the relocation survey of the properties stated in his reamended report that of the 3,384 square meters covered by Lot 2, Plan II-9205, only 1,976 square meters fall within the reservation area,[13] the RTC ordered TCT 3913 covering the entire Lot 21 (sic) Plan II-9205 cancelled.

The petitioners appealed to the Court of Appeals which affirmed in toto the findings of the lower Court; hence this petition raising the following issues:1. The respondent Court of Appeals committed grave abuse of discretion in affirming in toto the decision of the lower court.2. The declaration of nullity of the original certificates of title and subsequent transfer certificates of titles of the petitioners over the properties in question is contrary to law and jurisprudence on the matter.3. The forfeiture of all improvements introduced by the petitioners in the premises in favor of the government is against our existing law and jurisprudence.

The issues raised essentially boil down to whether or not the alleged original certificate of titles issued pursuant to the order of the Court of First Instance in 1916-1917 and the subsequent TCTs issued in 1953 pursuant to the petition for reconstitution are valid.

Petitioners contend that the Treaty of Paris which ended the Spanish-American War at the end of the 19th century recognized the property rights of Spanish and Filipino citizens and the American government had no inherent power to confiscate properties of private citizens and declare them part of any kind of government reservation. They allege that their predecessors in interest have been in open, adverse and continuous possession of the subject lands for 20-50 years prior to their registration in 1916-1917. Hence, the reservation of the lands for provincial purposes in 1913 by then Governor-general Forbes was tantamount to deprivation of private property without due process of law.

In support of their claim, the petitioners presented copies of a number of decisions of the Court of First Instance of Albay, 15th Judicial District of the United States of America which state that the predecessors in interest of the petitioners' father Diego Palomo, were in continuous, open and adverse possession of the lands from 20 to 50 years at the time of their registration in 1916.

We are not convinced.

The Philippines passed to the Spanish Crown by discovery and conquest in the 16th century. Before the Treaty of Paris in April 11, 1899, our lands, whether agricultural, mineral or forest were under the exclusive patrimony and dominion of the Spanish Crown. Hence, private ownership of land could only be acquired through royal concessions which were documented in various forms, such as (1) Titulo Real or Royal Grant," (2) Concession Especial or Special Grant, (3) Titulo de Compra or Title by Purchase and (4) Informacion Posesoria or Possessory Information title obtained under the Spanish Mortgage Law or under the Royal Decree of January 26, 1889.

Unfortunately, no proof was presented that the petitioners' predecessors in interest derived title from an old Spanish grant. Petitioners placed much reliance upon the declarations in Expediente No. 5, G.L.R.O. Record Decision No. 9820, dated January 17, 1917; Expediente No. 6, G.L.R.O. Record No. 9821, dated December 28, 1916; Expediente No. 7, G.L.R.O. Record No. 9822, dated December 9, 1916; Expediente No. 8, G.L.R.O. Record No. 9823, dated December 28, 1916 and Expediente No. 10, G.L.R.O. Record No. 9868, dated December 9, 1916 of the Court of First Instance of Albay, 15th Judicial District of the United States of America presided by Judge Isidro Paredes that their predecessors in interest were in open, adverse and continuous possession of the subject lands for 20-50 years.[14] The aforesaid "decisions" of the Court of First Instance, however,

were not signed by the judge but were merely certified copies of notification to Diego Palomo bearing the signature of the clerk of court.

Moreover, despite claims by the petitioners that their predecessors in interest were in open , adverse and continuous possession of the lands for 20 to 50 years prior to their registration in 1916-1917, the lands were surveyed only in December 1913, the very same year they were acquired by Diego Palomo. Curiously, in February 1913 or 10 months before the lands were surveyed for Diego Palomo, the government had already surveyed the area in preparation for its reservation for provincial park purposes. If the petitioners' predecessors in interest were indeed in possession of the lands for a number of years prior to their registration in 1916-1917, they would have undoubtedly known about the inclusion of these properties in the reservation in 1913. It certainly is a trifle late at this point to argue that the government had no right to include these properties in the reservation when the question should have been raised 83 years ago.

As regards the petitioners' contention that inasmuch as they obtained the titles without government opposition, the government is now estopped from questioning the validity of the certificates of title which were granted. As correctly pointed out by the respondent Court of Appeals, the principle of estoppel does not operate against the Government for the act of its agents. [15]

Assuming that the decrees of the Court of First Instance were really issued, the lands are still not capable of appropriation. The adverse possession which may be the basis of a grant of title in confirmation of imperfect title cases applies only to alienable lands of the public domain.

There is no question that the lands in the case at bar were not alienable lands of the public domain. As testified by the District Forester, records in the Bureau of Forestry show that the subject lands were never declared as alienable and disposable and subject to private alienation prior to 1913 up to the present.[16] Moreover, as part of the reservation for provincial park purposes, they form part of the forest zone.

It is elementary in the law governing natural resources that forest land cannot be owned by private persons. It is not registrable and possession thereof, no matter how lengthy, cannot convert it into private property,[17] unless such lands are reclassified and considered disposable and alienable.

Neither do the tax receipts which were presented in evidence prove ownership of the parcels of land inasmuch as the weight of authority is that tax declarations are not conclusive proof of ownership in land registration cases.[18]

Having disposed of the issue of ownership, we now come to the matter regarding the forfeiture of improvements introduced on the subject lands. It bears emphasis that Executive Order No. 40 was already in force at the time the lands in question were surveyed for Diego Palomo. Petitioners also apparently knew that the subject lands were covered under the reservation when they filed a petition for reconstitution of the lost original certificates of title inasmuch as the blueprint of Survey Work Order Number 21781 of Plan II-9299 approved by the Chief of the Land Registration Office Enrique Altavas in 1953 as a true and correct copy of the Original Plan No. II-9299 filed in the Bureau of Lands dated September 11, 1948[19] contains the following note, "in conflict with provincial reservation."[20] In any case, petitioners are presumed

to know the law and the failure of the government to oppose the registration of the lands in question is no justification for the petitioners to plead good faith in introducing improvements on the lots.

Finally, since 1,976 square meters of the 3,384 square meters covered by TCT 3913 fall within the reservation, TCT 3913 should be annulled only with respect to the aforesaid area. Inasmuch as the bamboo groves leveled in TCT 3913 and subject of Civil Case T-143,[21]were within the perimeter of the national park,[22] no pronouncement as to damages is in order.

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED with the modification that TCT 3913 be annulled with respect to the 1,976 square meter area falling within the reservation zone.

SO ORDERED.

LEOPOLDO C. LEONARDO, represented by his daughter EMERENCIANA LEONARDO, petitioner, vs. VIRGINIA TORRES MARAVILLA and LEONOR C. NADAL, as Administratrices of the Estate of MARIANO TORRES, as substituted by FE NADAL VENTURINA,respondents.

D E C I S I O N

YNARES-SANTIAGO, J.:

This is a petition for review seeking to set aside the decision[1] dated November 26, 1999 and the resolution[2] dated May 19, 2000 of the Court of Appeals[3] in CA-G.R. CV No. 52932, which affirmed the order[4] of the Regional Trial Court of Pasay City, Branch III, dismissing petitioners complaint[5] for Delivery of Possession of Property, Owners Duplicate Certificate of Title, Rentals and Damages, in Civil Case No. 93-10282.

The instant controversy stemmed from a dispute over a 1,151.80 square meter lot, located in Pasay City, covered by Transfer Certificate of Title No. 2355 (34515),[6] and registered in the name of Mariano Torres y Chavarria, the predecessor-in-interest of respondents. Petitioner claims that he is the lawful owner of the disputed lot, having purchased it on September 29, 1972 from a certain Eusebio Leonardo Roxas,[7] who in turn acquired the same lot by purchase on August 28, 1972 from Mariano Torres y Chavarria.[8]

On September 14, 1972, Eusebio Leonardo Roxas sent a letter-request[9] to the Register of Deed of Pasay City asking for the registration of the deed of sale allegedly executed in his favor by Mariano Torres y Chavarria. The letter was entered in the Registers Primary Book under Entry No. 55780, Vol. V. The Office of the Register of Deeds, however, did not register the deed as it was awaiting the final disposition of a pending case[10] between Mariano Torres y Chavarria and a certain Francisco E. Fernandez involving title of the lot.[11] Incidentally, the said case was decided in favor of Mariano Torres y Chavarria, which decision became final and executory on September 21, 1972.[12]

On October 6, 1972, petitioner likewise asked the Register of Deeds to register the deeds of sale dated August 28, 1972 and the September 29, 1972 involving Transfer Certificate of Title No. 2355 (34515), and to issue the corresponding transfer certificate of title in his name.[13] Petitioner did not present the owners duplicate copy of Transfer Certificate of Title No. 2355 (34515), which remained in the possession of respondents. Petitioners letter-request was entered in the Primary Books of the Register of Deeds under Entry No. 55952, V.5, on October 19, 1972. The Register of Deeds, however, certified that the original copy of TCT No. 2355 (34515), could not be retrieved or located in the office of the Register of Deeds of Pasay, hence, the requested registration could not be effected.[14]

On November 13, 1972, petitioner executed an affidavit of adverse claim[15] over TCT No. 2355 (34515) which was entered in the Primary Book under Entry No. 56039, Vol. 5, on November 15, 1972.

On May 18, 1993, the Register of Deeds of Pasay City was able to retrieve the original copy of TCT No. 2355 (34515).[16]

On May 20, 1993, petitioner caused the annotation of his affidavit of adverse claim on TCT No. 2355 (34515),[17] and asked the respondents to deliver possession of the owners duplicate copy of TCT No. 2355 (34515). When the latter ignored his demand, petitioner filed on September 6, 1993 a complaint for Delivery of Possession of Property, Owners Duplicate Certificate of Title, Rentals and Damages. Petitioner alleged that he filed the case against respondents only in 1993 because he was living abroad.[18]

In their Answer, respondents countered that since 1938 up to the present, the lot in question has been registered in the name of the late Mariano Torres y Chavarria, their predecessor-in-interest, and that they have been in material possession thereof in the concept of owners. In the settlement of the estate of Mariano Torres y Chavarria, who died on August 30, 1974,[19] his widow, Rosario Nadal, and his natural child, Virginia Torres Maravilla, acquired the disputed lot by succession.[20] After the demise of Rosario Nadal, sometime in January 1990, her share in the said lot was inherited by her sister, Leonor Nadal, who was appointed as special administratrix of the estate of Rosario Nadal.[21] Subsequently, Leonor Nadal was also appointed administratrix of the estate of Mariano Torres y Chavarria.[22]Respondents maintain that they have been in open and peaceful possession of the said property and that it was only in 1993 when they came to know of the alleged claim of petitioners over the same property.

Respondents contended further that the deeds of sale dated August 28, 1972 and September 29, 1972 are falsified documents and that the signature of Mariano Torres y Chavarria on the August 28, 1972 deed of absolute sale was a forgery. On February 28, 1994, respondents filed a motion to dismiss[23] the complaint on the grounds of: (1) non-payment of the correct docket fees; (2) prescription; and (3) laches. The motion to dismiss was denied on July 25, 1995.

Meanwhile, Leonor Nadal died on October 23, 1995, and was substituted by Fe Nadal Venturina on January 19, 1996.[24]

On motion of respondents, the trial court reconsidered its order of July 25, 1995, and issued an order on February 1, 1996, dismissing petitioners complaint on the ground of prescription and laches.

Dissatisfied, petitioner appealed to the Court of Appeals which affirmed the assailed order on November 26, 1999. The motion for reconsideration was denied on May 19, 2000.

Hence, the instant petition contending that the Court of Appeals erred in holding that:

I

THE RIGHT OF PETITIONER TO ENFORCE THE DEEDS (EXHS. 2 AND 4) THROUGH HIS COMPLAINT FILED ON SEPTEMBER 6, 1993 HAD ALREADY PRESCRIBED ON SEPTEMBER 29, 1982 PER ARTICLE 114[4];

II

THE TITLE ON THE PROPERTY REMAINED IN THE VENDORS (MARIO TORRES) NAME BEFORE AND AFTER THE EXECUTION OF THE DEEDS (EXHS. 2 AND 4);

III

IF THE ORIGINAL COPY OF THE TCT WAS LOST/MISSING IN THE FILES OF THE REGISTER OF DEEDS, PETITIONER SHOULD HAVE FILED A PETITION FOR RECONSTITUTION OF THE TITLE;

IV

PETITIONERS INACTION FOR 21 YEARS TO ENFORCE HIS RIGHTS ON THE DEEDS (EXHS. 2 AND 4) MADE RESPONDENTS BELIVE THAT HE HAD ABANDONED HIS RIGHTS ON THE PROPERTY; and,

V

LACHES HAD OPERATED NOTWITHSTANDING THAT PETITIONER WROTE THE REGISTER OF DEEDS OF PASAY CITY (EXH. 8) AND THE LATTER REPLIED THAT REGISTRATION COULD NOT BE EFFECTED BECAUSE THE TITLE WAS MISSING (EXH. 9).[25]

The issue in the instant case is whether or not petitioners action is barred by prescription and laches.

The Court of Appeals ruled that petitioners cause of action is founded on the deed of absolute sale allegedly executed by respondents predecessor-in-interest on August 28, 1972, which purportedly conveyed the disputed lot to Eusebio Leonardo Roxas, and the deed of sale dated September 29, 1972, whereby the latter sold the same lot to petitioner. Being an action based on written contracts, petitioners complaint falls under Article 1144[26] of the Civil Code, which provides that an action upon a written contract shall prescribe in ten years from the time the right of action accrued. Since petitioner brought the instant case only on September 6, 1993, or 21 years from the time his supposed right of action accrued on September 29, 1972, i.e., the date of execution of the contract conveying to him the questioned lot, his action was clearly barred by the statute of limitations.

Petitioner, on the other hand, contends that the applicable provision is Article 1141[27] and not 1144 of the Civil Code because his action is one for recovery of possession of real property which prescribes in thirty years.

The contention is without merit. Petitioners action is actually an action for specific performance, i.e., to enforce the deed of absolute sale allegedly executed in his favor. It is a fundamental principle that ownership does not pass by mere stipulation but by delivery. The delivery of a thing constitutes a necessary and indispensable requisite for the purpose of acquiring the ownership of the same by virtue of a contract.[28] Under Article 1498 of the Civil Code, when the sale is made through a public instrument, the execution thereof shall be equivalent to the delivery of the thing which is the object of the contract, if from the deed the contrary does not appear or cannot clearly be inferred. Thus, the execution of the contract is only a presumptive, not conclusive delivery which can be rebutted by evidence to the contrary, as when there is failure on the part of the vendee to take material possession of the land subject of the sale in the concept of a purchaser-owner.[29]

In the case at bar, it is not disputed that the lot in question was never delivered to petitioner notwithstanding the alleged execution of a deed of absolute sale. From 1972 to 1993, petitioner neither had, nor demanded, material possession of the disputed lot. It was the respondents who have been in control and possession thereof in the concept of owners since 1938 up to the present. It follows that ownership of the lot was never transferred to petitioner. Hence, he can not

claim that the instant case is an accion reivindicatoria or an action to recover ownership and full possession of the property which, in the first place, never came into his possession for lack of the requisite delivery. Thus, in Danguilan v. Intermediate Appellate Court,[30] where the requisite delivery was not effected, the Court held that:Since in this jurisdiction it is a fundamental and elementary principle that ownership does not pass by mere stipulation but only by delivery (Civil Code, Art. 1095; Fidelity and Surety Co. v. Wilson, 8 Phil. 51), and the execution of a public document does not constitute sufficient delivery where the property involved is in the actual and adverse possession of third persons (Addison v. Felix, 38 Phil. 404; Masallo v. Cesar, 39 Phil. 134), it becomes incontestable that even if included in the contract, the ownership of the property in dispute did not pass... Not having become the owner for lack of delivery, [one] cannot presume to recover the property from its present possessors. [The] action, therefore, is not one of revindicacion, but one against [the] vendor for specific performance of the sale ...

Clearly, the case filed by petitioner was an action for specific performance of a written contract of sale which, pursuant to Article 1144 of the Civil Code, prescribes in 10 years from the accrual of the right of action. In a contract of sale, there is a reciprocal obligation to pay the purchase price and the corresponding delivery of the thing sold, which obligations give rise to a right of action in case of breach.[31] Here, petitioners right of action for specific performance or rescission arose when delivery of the thing sold was not effected on September 29, 1972, despite the payment of the purchase price. Hence, from 1972 to 1993, when petitioner filed the instant case, 21 years had elapsed barring the institution of petitioners action which is definitely beyond the 10 year prescriptive period.

Petitioners claim that the prescriptive period was tolled when he registered his adverse claim with the Register of Deeds is untenable.In Garbin v. Court of Appeals, et al.,[32] wherein an action for annulment of a deed of sale was dismissed on the ground of prescription and laches, the Court held that the registration of an adverse claim does not toll the running of the prescriptive period, thus:

x x x the title of the defendant must be upheld for failure or the neglect of the plaintiffs for an unreasonable and unexplained length of time of more than fifteen (15) years since they registered their adverse claim, or for a period of more than three (3) decades since the execution of the deed of sale in their favor upon which their adverse claim is based, to do that which, by exercising diligence, could or should have been done earlier. For it is this negligence or omission to assert a right within reasonable time that is construed that plaintiffs had abandoned their right to claim ownership under the deed of sale, or declined to assert it. Thus, when a person slept on his rights for 28 years from the time of the transaction, before filing the action, amounts to laches which cannot be excused even by ignorance resulting from inexcusable negligence (Vda. de Lima v. Tiu, 52 SCRA 516 [1970]).

In the same vein, the annotation on May 20, 1993 of the November 13, 1972 affidavit of adverse claim on TCT No. 2355 (34515) afforded no protection to petitioner for the same reason that said belated assertion of his alleged right over the property is barred by prescription and laches.

Moreover, the affidavit of adverse claim registered by petitioner in 1972 was ineffective. The law enforced at the time petitioner filed an adverse claim was Section 110, of Act 496,[33] also

known as the Land Registration Act, (now Section 70[34] of P.D. No. 1529, or the Property Registration Decree[35]), which stated:Sec. 110. Whoever claims any part or interest in registered land adverse to the registered owner, arising subsequent to the date of the original registration, may, if no other provision is made in this Act for registering the same, make a statement in writing setting forth fully his alleged right or interest, and how or under whom acquired, and a reference to the volume and page of the certificate of title of the registered owner, and a description of the land in which the right or interest is claimed.The statement shall be signed and sworn to, and shall state the adverse claimant's residence and designate a place at which all notices may be served upon him. This statement shall be entitled to registration as an adverse claim, and the court, upon a petition of any party in interest, shall grant a speedy hearing upon the question of the validity of such adverse claim and shall enter such decree therein as justice and equity may require. If the claim is adjudged to be invalid, the registration shall be cancelled. If in any case the court after notice and hearing shall find that a claim thus registered was frivolous or vexatious, it may tax the adverse claimant double or treble costs in its discretion.

In Junio v. De los Santos, et al.,[36] an action for cancellation of an adverse claim, the Court ruled that the procedure for registration of voluntary instruments, like a deed of sale, is laid down in Section 57[37] of Act 496. But where the vendor refused to deliver to the vendee the owners duplicate certificate of title, which title must be presented in order that the deed of conveyance may be registered and the corresponding transfer certificate of title may be issued,[38] the vendee may file with the Register of Deeds an adverse claim under Section 110 of Act No. 496. For an adverse claim to be valid, it must be shown that a demand was made on the vendor and that the latter refused to surrender the owners duplicate certificate of title.[39]

In instant case, it was not shown that Mariano Torres y Chavarria, the registered owner of the disputed lot, refused to surrender the owners duplicate certificate of title, nor that petitioner demanded the surrender thereof. In the affidavit of adverse claim registered by petitioner he merely stated: 9. That in the meantime the herein (VENDEE) LEOPOLDO C. LEONARDO has no means to get or secure the aforementioned Owner[]s Duplicate Copy of Title No. 2355 (34515) Pasay City Registry Office, from the said Parties, he (Leopoldo C. Leonardo) hereby requests the Register of Deeds of Pasay City to annotate whatever rights and interest on the ORIGINAL CERTIFICATE OF TITLE No. 2355 (34515), Pasay Registry Office, in the name of MARIANO C. TORRES as a Notice of Adverse Claim(s) in favor of LEOPOLDO C. LEONARDO to any third party/ies; For lack of the requisite unjustified refusal of the registered owner to surrender the owners duplicate certificate of title, the affidavit of adverse claim registered by petitioner is not valid.

Likewise, there is no merit in petitioner's assertion that the prescriptive period should commence to run only on May 18, 1993 when the original copy of Transfer Certificate of Title No. 2355 (34515) was retrieved by the Register of Deeds. The loss of the original title will not prevent petitioners pursuit to enforce his right. Otherwise stated, the recovery of the original title or the reconstitution thereof is not the only means by which petitioner could protect his right. Under Article 1155 of the Civil Code - [t]he prescription of actions is interrupted when they are filed in court, when there is a written extrajudicial demand by the creditors, and when there is any written acknowledgement of the debt by the debtor. Petitioner therefore may pursue either judicial or

extrajudicial means manifesting his interest in the questioned property in order to interrupt the prescriptive period.

Certainly, petitioners action filed on September 6, 1993 is barred by the 10 year prescriptive period from the accrual of his alleged right of action on September 29, 1972. In the same vein, said action is barred by laches having allowed 21 years to lapse before enforcing his alleged right. Laches is defined as failure or neglect for an unreasonable and unexplained length of time, to do that which, by exercising due diligence could or should have been done earlier.  It is negligence or omission to assert a right within a reasonable time, warranting presumption that the party entitled to assert it has abandoned it or has declined to assert it.[40] Tempus enim modus tollendi obligationes et actiones, quia tempus currit contra desides et sui juris contemptores For time is a means of dissipating obligations and actions, because time runs against the slothful and careless of their own rights.[41]

WHEREFORE, in view of all the foregoing, the instant petition is DENIED. The November 26, 1999 decision and the May 19, 2000 resolution of the Court of Appeals in CA-G.R. CV No. 52932, which sustained the February 1, 1996 order of the Regional Trial Court of Pasay City, Branch III, dismissing petitioners complaint in Civil Case No. 93-10282 on the ground of prescription and laches, is AFFIRMED.

SO ORDERED.

SPOUSES FRANCISCO and AMPARO DE GUZMAN, JR., petitioners, vs. THE NATIONAL TREASURER OF THE REPUBLIC OF THE PHILIPPINES and THE REGISTER OF DEEDS OF MARIKINA CITY, respondents.

R E S O L U T I O N

KAPUNAN, J.:

Petitioners De Guzman spouses seek the reversal of the decision of the Court of Appeals holding that the Assurance Fund established under the Property Registration Decree is not liable for the losses allegedly sustained by petitioners.

The facts that led to the present proceedings are succinctly set forth by the Court of Appeals as follows:On 01 July 1985, Urlan Milambiling and Asuncion Velarde purchased a parcel of land situated in Antipolo, Rizal from Sta. Lucia Realty and Development, Inc. Although they were already civilly married, Asuncion used her maiden name in the Deed of Sale because, being conservative, she did not want to use her married name until she was married in church.After their church wedding on 05 July 1985, Urlan and Asuncion Milambiling left for Europe on their honeymoon and from there, they proceeded to Saudi Arabia where they were working as accountant and nurse, respectively.Before leaving for abroad, the spouses Milambiling entrusted the Deed of Sale of the parcel of land they bought from Sta. Lucia Realty and the corresponding Certificate of Title still in the name of Sta. Lucia Realty to a long-time friend and one of their principal wedding sponsors, Marilyn Belgica, who volunteered to register the sale and transfer the title in their names.Later, the spouses Milambiling learned from Belgica through an overseas telephone call that a transfer certificate of title of the said parcel of land had already been issued in their names. Belgica committed to the Milambiling spouses that she will personally deliver the title to them in Saudi Arabia. Sometime in May 1986, Belgica arrived in Saudi Arabia but the title was not with her. Belgica said that she left it in their house in the Philippines and forgot to bring it with her.Urlan Milambiling was angry and immediately called up his relatives in the Philippines and asked them to find out from the Office of the Register of Deeds of Rizal what happened to their title. He was informed that the Certificate of Title covering the said parcel of land had indeed been transferred in their names but was subsequently cancelled and title transferred in the names of x x x the spouses De Guzman.Milambiling was also told about the circumstances that led to the cancellation of their title. It appears that while the spouses Milambiling were in Saudi Arabia, a couple identifying themselves as the spouses Urlan and Asuncion Milambiling went to the house of a certain Natividad Javiniar, a real estate broker, inquiring if the latter could find a buyer for their lot located in Vermont Subdivision, Antipolo, Rizal. Javiniar accompanied the said couple to the house of [the] spouses De Guzman. Having somehow obtained possession of the owners duplicate copy of the certificate of title in the name of the spouses Milambiling, the impostor-couple were able to convince the de Guzmans to buy the property. On 20 November 1985, the impostor-couple, posing as the spouses Milambiling, executed a Deed of Absolute Sale in favor of [the] spouses de Guzman who paid the

stipulated purchase price of P99,200.00. On 30 April 1986, [the De Guzmans] registered the said sale with the Register of Deeds of Marikina who cancelled the certificate of title in the name of the Milambilings and issued TCT No. N-117249 in the names of [the] De Guzman[s].Upon learning of the above, Urlan Milambiling quickly returned to the Philippines. On 24 July 1986, the spouses Milambiling filed an action against [the spouses De Guzman] before the Regional Trial Court of Antipolo, Rizal, Branch 73, for declaration of nullity of sale and title with damages.

x x x

[The] spouses De Guzman appealed the decision of the trial court to the Court of Appeals. On 18 July 1991, [the Court of Appeals] rendered its decision affirming the decision of the court a quo.[The] spouses De Guzman then went to the Supreme Court on a petition for review on certiorari. On 01 July 1992, the High Tribunal issued a resolution denying the petition on the ground that no reversible error was committed by the Court of Appeals.

On 11 February 1993, [the] spouses De Guzman filed [an] action for damages against the Assurance Fund before the Regional Trial Court of Pasig, Branch 153[,] [impleading the National Treasurer of the Republic of the Philippines and the Register of Deeds of Marikina City.][1]

On January 20, 1995, the RTC rendered its decision finding in favor of the De Guzman spouses, thus:

IN VIEW OF THE FOREGOING, judgment is hereby rendered in favor of the plaintiffs and against the defendants adjudging the Assurance Fund liable to the amount actually paid by the plaintiffs which is in the amount of P99,200.00 and ordering the defendants Treasurer and/or Registrar to pay or cause the payment of the said amount to herein plaintiffs.

SO ORDERED.[2]

The National Treasurer and the Marikina Registrar of Deeds appealed from the above decision. The Court of Appeals found merit in the appeal and reversed the decision of the RTC.

We affirm the decision of the Court of Appeals.

Section 95 of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, provides:

SEC. 95. Action for compensation from funds. A person who, without negligence on his part, sustains loss or damage, or is deprived of land or any estate or interest therein in consequence of the bringing of the land under the operation of the Torrens system or arising after original registration of land, through fraud or in consequence of any error, omission, mistake or misdescription in any certificate of title or in any entry or memorandum in the registration book, and who by the provisions of this Decree is barred or otherwise precluded under the provision of any law from bringing an action for the recovery of such land or the estate or interest therein, may bring an action in any court of competent jurisdiction for the recovery of damage to be paid out of the Assurance Fund.

The precursor of Section 95, Section 101 of the Land Registration Act (Act No. 496), similarly states:

SEC. 101. Any person who without negligence on his part sustains loss or damage through any omission, mistake or misfeasance of the clerk, or register of deeds, or of any examiner of titles, or of any deputy or clerk of the register of deeds in the performance of their respective duties under the provisions of this Act, and any person who is wrongfully deprived of any land or any interest therein, without negligence on his part, through the bringing of the same under the provisions of this Act or by the registration of any other persons as owner of such land, or by any mistake, omission, or misdescription in any certificate or owners duplicate, or in any entry or memorandum in the register or other official book, or by any cancellation, and who by the provisions of this Act is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same, may bring in any court of competent jurisdiction an action against the Treasurer of the Philippine Archipelago for the recovery of damages to be paid out of the Assurance Fund.

It may be discerned from the foregoing provisions that the persons who may recover from the Assurance Fund are:1) Any person who sustains loss or damage under the following conditions:

a) that there was no negligence on his part; and

b) that the loss or damage sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties under the provisions of the Land Registration Act, now, the Property Registration Decree; or

2) Any person who has been deprived of any land or interest therein under the following conditions:

a) that there was no negligence on his part;

b) that he was deprived as a consequence of the bringing of his land or interest therein under the provisions of the Property Registration Decree; or by the registration by any other person as owner of such land; or by mistake, omission or misdescription in any certificate of owners duplicate, or in any entry or memorandum in the register or other official book or by any cancellation; and

c) that he is barred or in any way precluded from bringing an action for the recovery of such land or interest therein, or claim upon the same.[3]

The Court of Appeals correctly held that petitioners circumstances do not fall under the first case. Petitioners have not alleged that the loss or damage they sustained was through any omission, mistake or malfeasance of the court personnel, or the Registrar of Deeds, his deputy, or other employees of the Registry in the performance of their respective duties. Moreover, petitioners were negligent in not ascertaining whether the impostors who executed a deed of sale in their (petitioner's) favor were really the owners of the property.[4]

Nor does petitioners situation fall under the second case. They were not deprived of their land as a consequence of the bringing of [the] land or interest therein under the provisions of the Property Registration Decree. Neither was the deprivation due to the registration by any other

person as owner of such land, or by mistake, omission or misdescription in any certificate or owners duplicate, or in any entry or memorandum in the register or other official book or by any cancellation.

Petitioners' claim is not supported by the purpose for which the Assurance Fund was established. The Assurance Fund is intended to relieve innocent persons from the harshness of the doctrine that a certificate is conclusive evidence of an indefeasible title to land.[5]Petitioners did not suffer any prejudice because of the operation of this doctrine. On the contrary, petitioners sought to avail of the benefits of the Torrens System by registering the property in their name. Unfortunately for petitioners, the original owners were able to judicially recover the property from them. That petitioners eventually lost the property to the original owners, however, does not entitle them to compensation under the Assurance Fund. While we commiserate with petitioners, who appear to be victims of unscrupulous scoundrels, we cannot sanction compensation that is not within the law's contemplation. As we said in Treasurer of the Philippines vs. Court of Appeals,[6] the Government is not an insurer of the unwary citizens property against the chicanery of scoundrels. Petitioners recourse is not against the Assurance Fund, as the Court of Appeals pointed out, but against the rogues who duped them.

ACCORDINGLY, the petition is DENIED.

JAMES R. BRACEWELL, petitioner, vs. HONORABLE COURT OF APPEALS and REPUBLIC OF THE PHILIPPINES, respondents. ULANDU

D E C I S I O N

YNARES-SANTIAGO, J.:

Before us is a petition to affirm the Order of the Regional Trial Court of Makati, Branch 58, in LRC Case No. M-77,[1] which was reversed by respondent Court of Appeals in its Decision dated June 29, 1992 in CA-G.R. CV No. 26122.[2] Petitioners Motion for Reconsideration was denied by respondent court on September 30, 1992.[3]The controversy involves a total of nine thousand six hundred fifty-seven (9,657) square meters of land located in Las Pias, Metro Manila. The facts show that sometime in 1908, Maria Cailles, married to James Bracewell, Sr., acquired the said parcels of land from the Dalandan and Jimenez families of Las Pias; after which corresponding Tax Declarations were issued in the name of Maria Cailles. On January 16, 1961, Maria Cailles sold the said parcels of land to her son, the petitioner, by virtue of a Deed of Sale which was duly annotated and registered with the Registry of Deeds of Pasig, Rizal. Tax Declarations were thereafter issued in the name of petitioner, cancelling the previous Tax Declarations issued to Maria Cailles.On September 19, 1963, petitioner filed before the then Court of First Instance of Pasig, Rizal an action for confirmation of imperfect title under Section 48 of Commonwealth Act No. 141.[4] The case was docketed as L.R.C. Case No.4328. On February 21, 1964, the Director of Lands, represented by the Solicitor General, opposed petitioners application on the grounds that neither he nor his predecessors-in-interest possessed sufficient title to the subject land nor have they been in open, continuous, exclusive and notorious possession and occupation of the same for at least thirty (30) years prior to the application, and that the subject land is part of the public domain.[5]The registration proceedings were meanwhile suspended on account of an action filed by Crescencio Leonardo against Maria Cailles before the then Court of First Instance of Pasig, Rizal. The case was finally disposed of by this Court in G.R. No. 5263 where the rights of Maria Cailles were upheld over those of the oppositor Leonardo.[6]On March 26, 1985, the entire records of the registration case were forwarded to the Makati Regional Trial Court[7] where it was docketed as Land Registration Case No. M-77. The Solicitor General resubmitted his opposition to the application on July 22, 1985,[8] this time alleging the following additional grounds: (1) the failure of petitioner to prosecute his action for an unreasonable length of time; and (2) that the tax declarations attached to the complaint do not constitute acquisition of the lands applied for. ManikxOn May 3, 1989, the lower court issued an Order granting the application of petitioner.[9] The Solicitor General promptly appealed to respondent Court which, on June 29, 1992, reversed and set aside the lower courts Order.[10] It also denied petitioners Motion for Reconsideration in its Resolution of September 30, 1992.[11]Hence, the instant Petition anchored upon the following grounds -"I. The Honorable Court of Appeals ERRED in finding that the commencement of thirty 30) year period mandated under Sec. 48 (b ) shall commence only on March 27, 1972 in accordance with the classification made by the Bureau of Forestry in First (1st) Indorsement dated August 20, 1986.

II. The Honorable Court of Appeals committed an ERROR in DRAWING conclusion and inference that prior to the declaration by the Bureau of Forestry in Marc 27; 1972, the parcels of land sought to be registered by Applicant was part of the forest land or forest reserves.III. The Honorable Court of Appeals ERRED and failed to consider VESTED RIGHTS of the applicant-appellant and his predecessors-in-interest land occupied from 1908."[12]The controversy is simple. On one hand, petitioner asserts his right of title to the subject land under Section 48 (b) of Commonwealth Act No. 141, having by himself and through his predecessors-in-interest been in open, continuous, exclusive and notorious possession and occupation of the subject parcels of land, under a bona fide claim of acquisition or ownership, since 1908. On the other hand it is the respondents position that since the subject parcels of land were only classified as alienable or disposable on March 27, 1972,[13] petitioner did not have any title to confirm when he filed his application in 1963. Neither was the requisite thirty years possession met.We agree with respondents.In Republic vs. Doldol,[14] the requisites to acquire title to public land were laid down, as follows --"x x x. The original Section 48(b) of C.A. No. 141 provided for possession and occupation of lands of the public domain since July 26, 1894. This was superseded b R.A. No. 1942 which provided for a simple thirty-year prescriptive period of occupation by an applicant for judicial confirmation of imperfect title. The same, however, has already been amended by Presidential Decree No. 1073, approved on January 25, 1977. As amended, Section 48(b) now reads: Maniks(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, or earlier, immediately preceding the filing of the application for confirmation of title, except when prevented by wars or force majeure. Those shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter." (italicized in the original)Thus, in the aforecited Republic vs. CA case, we stated that the Public Land Act requires that the applicant must prove (a) that the land is alienable public land and (b) that his open, continuous, exclusive and notorious possession and occupation of the same must be since time immemorial or for the period prescribed in the Public Land Act. When the conditions set by law are complied with, the possessor of the land, by operation of law, acquires a right to a grant, a government grant, without the necessity of a certificate of title being issued."Clear from the above is the requirement that the applicant must prove that the land is alienable public land. On this score, we agree with respondents that petitioner failed to show that the parcels of land subject of his application are alienable or disposable. On the contrary, it was conclusively shown by the government that the same were only classified as alienable or disposable on March 27, 1972. Thus, even granting that petitioner and his predecessors-in-interest had occupied the same since 1908, he still cannot claim title thereto by virtue of such possession since the subject parcels of land were not yet alienable land at that time nor capable of private appropriation. The adverse possession which may be the basis of a grant of title or confirmation of an imperfect title refers only to alienable or disposable portions of the public domain.[15]

A similar situation existed in the case of Reyes v. Court of Appeals,[16] where a homestead patent issued to the petitioners predecessor-in-interest was cancelled on the ground t at at the time it was issued, the subject land was still part of the public domain. In the said case, this Court ruled as follows --"Under the Regalian doctrine, all lands of the public domain belong to the State, and that the State is the source of any asserted right to ownership in land and charged with the conservation of such patrimony. This same doctrine also states that all lands not otherwise appearing to be clearly within private ownership are presumed to belong to the State (Director of Lands vs. Intermediate Appellate Court, 219 SCRA 340). ManikanHence, the burden of proof in overcoming the presumption of State ownership of lands of the public domain is on the person applying for registration. The applicant must show that the land subject of the application is alienable or disposable. This petitioners failed to do.We have stated earlier that at the time the homestead patent was issued to petitioners predecessor-in-interest, the subject land belong to the inalienable and undisposable portion of the public domain. Thus, any title issued in their name by mistake or oversight is void ab initio because at the time the homestead parent was issued to petitioners, as successors-in-interest of the original patent applicant, the Director of Lands was not then authorized to dispose of the same because the area was not yet classified as disposable public land. Consequently, the title issued to herein petitioners by the Bur au of Lands is void ab initio."

Prior to March 27, 1972, when the subject parcels of land were classified as inalienable or indisposable, therefore, the same could not be the subject of confirmation of imperfect title. There can be no imperfect title to be confirmed over lands not yet classified as disposable or alienable.[17] In the absence of such classification, the land remains unclassified public land until released therefrom and open to disposition.[18] Indeed, it has been held that the rules on the confirmation of imperfect title do not apply unless and until the land classified as forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain.[19]Neither has petitioner shown proof that the subject Forestry Administrative Order recognizes private or vested rights under which his case may fall. We only find on record the Indorsement of the Bureau of Forest Development[20] from which no indication of such exemption may be gleaned.Having found petitioner to have no cause of action for his application for confirmation of imperfect title, we see no need to discuss the other errors raised in this petition.WHEREFORE, premises considered, the instant Petition is hereby DENIED for lack of merit. No pronouncement as to costs.SO ORDERED.

VICENTE YU CHANG AND SOLEDAD YU CHANG,Petitioners,

- versus -REPUBLIC OF THE PHILIPPINES,

Respondent.

G.R. No. 171726Present:

BRION,* J.,

Acting Chairperson,

BERSAMIN,

ABAD,**

VILLARAMA, JR., and

SERENO, JJ.Promulgated:February 23, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xDECISION

VILLARAMA, JR. J.:

This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as amended, assails the Decision[1] dated August 26, 2005 and the Resolution[2] dated February 13, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67430. The CA reversed and set aside the April 28, 2000 Decision[3] of the Regional Trial Court of Pili, Camarines Sur, Branch 31, in LRC No. P-115, LRA Rec. No. N-68012, which granted petitioners application for registration of title over two parcels of land, denominated as Lots 2199 and 2200 of Cad. 291, Pili Cadastre.

The antecedent facts, as culled from the records, are as follows:

On March 22, 1949, petitioners father, L. Yu Chang[4] and the Municipality of Pili, Camarines Sur, through its then Mayor, Justo Casuncad, executed an Agreement to Exchange Real Property[5] wherein the former assigned and transferred to the Municipality of Pili his 400-square-meter residential lot in Barrio San Roque, Pili, Camarines Sur, in exchange for a 400-square-meter piece of land located in San Juan, Pili. Thereafter, L. Yu Chang and his family took possession of the property thus obtained and erected a residential house and a gasoline station thereon. He also declared the property in his name under Tax Declaration No. 01794[6] and 01795[7] and paid the real property taxes thereon as evidenced by twenty-eight (28) official receipts from February 21,

1951 up to March 10, 1976. When L. Yu Chang died on September 30, 1976, his wife, Donata Sta. Ana and his seven children inherited the property and succeeded in the possession of the property.

On March 1, 1978, a Deed of Transfer and Renunciation[8] of their rights over the property was executed by L. Yu Chang's five children, Rafaela, Catalina, Flaviana, Esperanza, and Antonio, in favor of herein petitioners. After the transfer, petitioners had the subject property surveyed and subdivided into two lots, Lot 2199[9] and Lot 2200[10] of Plan SWO-05-000888, Pili Cadastre. Petitioners also declared the lots in their names for taxation purposes as shown in Tax Declaration No. 02633[11] and paid the real property taxes thereon.

On February 21, 1997, petitioner Soledad Yu Chang, for herself and in representation of her brother and co-petitioner, Vicente Yu Chang, filed a petition[12] for registration of title over the aforementioned lots under the Property Registration Decree. In their petition, they declared that they are the co-owners of the subject lots; that they and their predecessors-in-interest have been in actual, physical, material, exclusive, open, occupation and possession of the above described parcels of land for more than 100 years[13]; and that allegedly, they have continuously, peacefully, and adversely possessed the property in the concept of owners. Hence, they are entitled to confirmation of ownership and issuance and registration of title in their names.

In support of their application, petitioners submitted the following documents, to wit:1.     Agreement to Exchange Real Property;2.     Deed of Transfer and Renunciation;3.     Approved Plan of Lot 2199 and Lot 2200, Cad. 291, Pili Cadastre;4.     Approved Technical Description of Lot 2199;5.     Approved Technical Description of Lot 2200;6.     Field Appraisal and Assessment Sheet (FAAS) A.R.P. No. 026-044 for Lot 2199 Cad. 291; and7.     Field Appraisal and Assessment Sheet (FAAS) A.R.P. No. 026-043 for Lot 2200 Cad. 291 Pili Cadastre.

The Republic, through the Office of the Solicitor General (OSG), filed an Opposition[14] to the application, alleging, inter alia, that: (1) neither the applicants nor their predecessors-in-interest have been in open, continuous, exclusive and notorious possession of the land since June 12, 1945 or prior thereto; (2) the muniments of title, tax declarations and tax receipts do not constitute

competent and sufficient evidence of a bona fide acquisition of the land; and (3) that the parcels of land applied for are portions of the public domain and are not subject to private appropriation.

No other parties filed their opposition. Thus, on December 14, 1998, an Order of General Default[15] was issued by the trial court.

After hearing, the trial court rendered a Decision granting petitioners' application. The fallo of the trial courts decision reads:WHEREFORE, in view of the foregoing, decision is hereby rendered as follows:

1. Confirming the imperfect title of the herein applicants Vicente Yu Chang and Soledad Yu Chang over the two (2) parcels of land described in paragraph two (2) page 2 of the Petition, particularly Lot 2199, Plans S0-05-000888, Cad. 291, Pili Cadastre and Lot 2200, Plan SWO-05-000888, Cad. 291, Pili Cadastre; both Filipino citizens, residents of #14 Joaquin St., Corinthian Garden, Quezon City and San Juan, Pili, Camarines Sur respectively;

2. Ordering the dismissal of the application in the Cadastral proceeding with respect to Lots 2199 and 2200, Cad. 291, Pili Cadastre under CAD Case No. N-9;

3. After finality of this decision, let the corresponding decree of registration be issued by the Administrator, Land Registration Authority to the herein applicants above-mentioned.

SO ORDERED.[16]

The Republic appealed the decision to the CA on the ground that the court a quo erred in granting petitioners application for registration of Lots 2199 and 2200 despite their failure to show compliance with the requirements of the law. In addition, the Republic asserted that the land was classified as public forest land; hence, it could not be subject to appropriation and alienation.

As aforesaid, the CA reversed the trial court's decision on August 26, 2005, and dismissed petitioners application for land registration. The CA considered the petition to be governed by Section 48(b) of Commonwealth Act (C.A.) No. 141 or the Public Land Act, as amended, and held that petitioners were not able to present incontrovertible evidence that the parcels of land sought to be registered are alienable and disposable.[17] The CA relied on the testimony of Lamberto Orcena, Land Management Officer III of CENRO, Iriga City, who testified that prior to October 30, 1986, the entire area encompassing the right side of the Naga-Legaspi Highway, including the

subject properties, was classified as forest land. According to the CA, even if the area within which the subject properties are located is now being used for residential and commercial purposes, such fact will not convert the subject parcels of land into agricultural land.[18] The CA stressed that there must be a positive act from the government declassifying the land as forest land before it could be deemed alienable or disposable land for agricultural or other purposes.[19]

Additionally, the CA noted that the lands sought to be registered were declared disposable public land only on October 30, 1986. Thus, it was only from that time that the period of open, continuous and notorious possession commenced to toll against the State.

Aggrieved, petitioners are now before this Court via the present appeal, raising the sole issue of whether the appellate court erred in dismissing their application for registration of title on the ground that they failed to prove compliance with the requirements of Section 48(b) of the Public Land Act, as amended.

Petitioners insist that the subject properties could no longer be considered and classified as forest land since there are buildings, residential houses and even government structures existing and standing on the land.[20] In their Memorandum,[21] petitioners point out that the original owner and possessor of the subject land was the Municipal Government of Pili which was established in 1930. The land was originally part of the municipal ground adjacent to the Municipal Building located at the right side of the Naga-Legaspi National Highway.[22] From 1949, when L. Yu Chang acquired the property through barter and up to the filing of petitioners application in 1997, petitioners and their predecessors-in-interest had been in actual physical and material possession of the land in the concept of an owner, notorious and known to the public and adverse to the whole world.

The Republic, through the OSG, for its part, maintains that petitioners failed to prove their open, continuous, exclusive and notorious possession of the subject lots for the period of time required by law. The OSG also submits that the subject lands were declared as alienable and disposable only on October 30, 1986.

We deny the petition for lack of merit.

Section 48(b) of the Public Land Act, as amended by P.D. 1073, under which petitioners application was filed, provides:

SEC. 48. The following described citizens of the Philippines, occupying lands of the public domain or claiming to own any such lands or an interest therein, but whose titles have not been perfected or completed, may apply to the Regional Trial Court of the province or city where the land is located for confirmation of their claims and the issuance of a certificate of title therefor, under the Property Registration Decree, to wit:

x x x x

(b) Those who by themselves or through their predecessors[-]in[-]interest have been in the open, continuous, exclusive, and notorious possession and occupation of alienable and disposable agricultural lands of the public domain, under a bona fide claim of acquisition or ownership, since June 12, 1945, except when prevented by war orforce majeure. These shall be conclusively presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title under the provisions of this chapter.x x x x[23]

Under this provision, in order that petitioners application for registration of title may be granted, they must first establish the following: (1) that the subject land forms part of the disposable and alienable lands of the public domain and (2) that they have been in open, continuous, exclusive and notorious possession and occupation of the same under a bona fide claim of ownership, since June 12, 1945, or earlier.[24] Applicants must overcome the presumption that the land they are applying for is part of the public domain and that they have an interest therein sufficient to warrant registration in their names arising from an imperfect title.[25]

In the instant case, petitioners did not adduce any evidence to the effect that the lots subject of their application are alienable and disposable land of the public domain. Instead, petitioners contend that the subject properties could no longer be considered and classified as forest land since there are building structures, residential houses and even government buildings existing and standing on the area. This, however, is hardly the proof required under the law. As clarified by this Court in Heirs of Jose Amunategui v. Director of Forestry,[26] a forested area classified as forest land of the public domain does not lose such classification simply because loggers or settlers may have stripped it of its forest cover. Parcels of land classified as forest land may actually be covered with grass or planted with crops by kaingin cultivators or other farmers. Forest lands do not have

to be on mountains or in out-of-the-way places. The classification of land is descriptive of its legal nature or status and does not have to be descriptive of what the land actually looks like.[27] Unless and until the land classified as forest land is released in an official proclamation to that effect so that it may form part of the disposable agricultural lands of the public domain, the rules on confirmation of imperfect title do not apply.[28] As aptly held by the appellate court:

[T]he fact that the area within which the subject parcels of land are located is being

used for residential and commercial purposes does not serve to convert the subject

parcels of land into agricultural land. It is fundamental that before any land may be

declassified from the forest group and converted into alienable or disposable land

for agricultural or other purposes, there must be a positive act from the

government. A person cannot enter into forest land and by the simple act of

cultivating a portion of that land, earn credits towards an eventual confirmation of

imperfect title. The Government must first declare the forest land to be alienable

and disposable agricultural land before the year of entry, cultivation and exclusive

and adverse possession can be counted for purposes of an imperfect title.[29]

Moreover, during the hearing of petitioners' application, the Republic presented a Report[30] of Rene Gomez, Land Investigator/Inspector, CENRO No. V-2-3, which disclosed that the lots applied for by the petitioners were classified as alienable and disposable under Project No. 9-E, L.C. Map No. 3393 and released and certified as such only on October 30, 1986. A Compliance[31] dated January 19, 1999 submitted by OIC-CENR Officer Joaquin Ed A. Guerrero to the trial court also stated that Lots. 2199 and 2200 of Cad. 291 were verified to be within Alienable and Disposable

area under Project No. 9-E, L.C. Map No. 3393, as certified on October 30, 1986 by the then

Bureau of Forestry. Evidently, therefore, the subject lots were declared alienable and disposable only on October 30, 1986. Prior to that period, the same could not be the subject of confirmation of imperfect title. Petitioners possession of the subject forest land prior to the date when it was classified as alienable and disposable is inconsequential and should be excluded from the computation of the period of possession.[32] To reiterate, it is well settled that possession of

forest land, prior to its classification as alienable and disposable land, is ineffective since such possession may not be considered as possession in the concept of owner.[33] The adverse possession which can be the basis of a grant of title in confirmation of imperfect title cases cannot commence until after forest land has been declared and alienable.[34]

Much as this Court wants to conform to the States policy of encouraging and promoting the distribution of alienable public lands to spur economic growth and remain true to the ideal of social justice, our hands are tied by the laws stringent safeguards against registering imperfect titles.[35] Here, petitioners failed to present well-nigh incontrovertible evidence necessary to prove their compliance of the requirements under Section 48(b) of C.A. No. 141. Hence, the Court of Appeals did not err in dismissing their application for confirmation and registration of title.

WHEREFORE, the petition is hereby DENIED.  The Decision dated August 26, 2005 and the Resolution dated February 13, 2006 of the Court of Appeals in CA-G.R. CV No. 67430 are hereby AFFIRMED.

With costs against the petitioners.

SO ORDERED.

CITY OF DUMAGUETE, herein Represented by City Mayor, Agustin R. Perdices,Petitioner,

- versus -PHILIPPINE PORTS AUTHORITY,Respondent.

G.R. No. 168973Present:CORONA, C.J.,Chairperson,LEONARDO-DE CASTRO,BERSAMIN,DEL CASTILLO, andVILLARAMA, JR., JJ.Promulgated:August 24, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xD E C I S I O N

LEONARDO-DE CASTRO, J.:

Before Us is a Petition for Review under Rule 45 of the Rules of Court assailing the Decision[1] dated March 4, 2005 and Resolution[2] dated June 6, 2005 of the Court Appeals in CA-G.R. SP No. 64379, which granted the Petition for Certiorari and Prohibition of respondent Philippine Ports Authority and set aside the Orders dated December 7, 2000 and February 20, 2001 of the Regional Trial Court (RTC), Branch 44 of the City of Dumaguete in LRC Case No. N-201.The antecedent facts are as follows:On October 14, 1998, petitioner City of Dumaguete, through Mayor Felipe Antonio B. Remollo (Remollo), filed before the RTC an Application for Original Registration of Title over a parcel of land with improvements, located at Barangay Looc, City of Dumaguete (subject property), under the Property Registration Decree. The application was docketed as LRC Case No. N-201.Petitioner alleged in support of its application:

1.                  That the applicant, City of Dumaguete through its Honorable Mayor Felipe Antonio B. Remollo, is the owner of the land subject of this application with all improvements and buildings comprising the Engineers Compound where it is now situated and has been in continuous occupation and possession of the same for more than 30 years or from the year 1960 (Affidavit of Ownership executed by Felipe Antonio G. Remollo, the City Mayor, dated August 21, 1998 herein attached as ANNEX A). The said land consist of 5,410 square meters and is situated and bounded and described as shown on the plan (true and photostatic copies of the original plan marked Psu-07-006805 approved by the Regional Technical Director of the [Department of Environment and Natural Resources] DENR, Regional Office, Cebu City herein attached as ANNEX B) and technical descriptions attached hereto (technical description attached as ANNEX C) and made a part hereof;2.                  That said land at the last assessment for taxation was assessed at P676,250, Philippine currency, with market value of P1,352,500.00, Philippine currency. (Declaration of Real Property with the assessed and market values attached as ANNEX D);3.                  That to the best of my knowledge and belief, there is no mortgage or encumbrance of any kind whatsoever affecting said land, nor another person having

any estate or interest therein, legal or equitable, in possession, remainder, reversion or expectancy;4.                  That the land was acquired by possessory title in open, continuous, adverse occupation and possession in the concept of owner for more than thirty years since 1960 (please refer to ANNEX A);5.                  That the land is adjoined by the following:NorthWestNorthEastSouthEastAll along line 1-2-3-4-5-6-7-8-9-10 by Flores Avenue, City Road and the Dumaguete Port RoadSouthWest along line 10-1 by Plan Msi-V-20453x x x x8. That the land included is bounded on the West by  and on the North by the , all public highways and on the East by the , a private road made part of the Port Zone.[3]

In an Order[4] dated October 23, 1998, the RTC noted that:A perusal of the records of the case shows that the annexes lack the following copies:

a)                  two blue print copies of the approved plan;b)                  two copies of the technical description of the lot sought to be registered;c)                  two copies of the Surveyors certificate;d)                 a certificate in quadruplicate of the City Assessor of the assessed value of the land;e)                  all original muniments of title in the possession of the applicant which prove ownership of the land;f)                   two copies of the petition/application.

Further, the application did not state the number of the lot sought to be registered, the number of parcels applied for, the improvements found thereon, and indicate whether it claims a portion of the road which serves as a boundary line.All these must be alleged in the petition so that the Court will know the nature of the property.

The RTC explained that the extra copies submitted by petitioner shall be forwarded by the RTC Clerk of Court to the Land Registration Commission (LRC) in  for comment. Only thereafter would the RTC set the application for hearing.Petitioner filed its Compliance[5] with the above-mentioned Order, submitting additional copies of the required documents and clarifying thus:

1.                  The approved plan does not state the number of lot sought to be registered because it is a public land, thus, only PSU-07-006805 appears on the plan which is being applied for registration;2.                  Only one (1) parcel of land is applied for by petitioners which consist of five thousand four hundred ten (5,410) square meters, more or less;

3.                  The City Engineers Building within the City Engineers compound are the only improvement found thereon; and4.                  Petitioners do not claim any portion of the road which serves as a boundary line.

The RTC accordingly set the initial hearing of LRC Case No. N-201 on , and sent notices to the parties.The Republic of the Philippines, represented by the Director of Lands, and respondent, represented by the Office of the Government Corporate Counsel, filed separate Oppositions [6] to the application for registration of petitioner. Both the Republic and respondent averred that petitioner may not register the subject property in its name since petitioner had never been in open, continuous, exclusive, and notorious possession of the said property for at least 30 years immediately preceding the filing of the application; and the subject property remains to be a portion of the public domain which belongs to the Republic.After several postponements of the scheduled hearings, petitioner presented the testimony of its first witness, Engineer Rilthe P. Dorado (Engr. Dorado), on. Engr. Dorados examination on the witness stand was terminated on . The presentation of the other witnesses of petitioner was then scheduled to continue on .[7]However, before the next hearing, respondent filed a Motion to Dismiss,[8] seeking the dismissal of LRC Case No. N-201 on the ground that the RTC lacked jurisdiction to hear and decide the case. Respondent argued that Section 14(1) of Presidential Decree No. 1529, otherwise known as the Property Registration Decree, refers only to alienable and disposable lands of the public domain under a bona fide claim of ownership. The subject property in LRC Case No. N-201 is not alienable and disposable, since it is a foreshore land, as explicitly testified to by petitioners own witness, Engr. Dorado. A foreshore land is not registerable. This was precisely the reason why, respondent points out, that the subject property was included in Presidential Proclamation No. 1232 (delineating the territorial boundaries of the Dumaguete Port Zone), so that the same would be administered and managed by the State, through respondent, for the benefit of the people.In its Terse Opposition to Oppositors Motion to Dismiss, petitioner claimed that the subject property was a swamp reclaimed about 40 years ago, which it occupied openly, continuously, exclusively, and notoriously under a bona fide claim of ownership. The technical description and approved plan of the subject property showed that the said property was not bounded by any part of the sea. Petitioner invoked Republic Act No. 1899,[9] which authorizes chartered cities and municipalities to undertake and carry out, at their own expense, the reclamation of foreshore lands

bordering them; and grants said chartered cities and municipalities ownership over the reclaimed lands. Presidential Proclamation No. 1232 is immaterial to the present application for registration because it merely authorizes respondent to administer and manage the Dumaguete Port Zone and does not confer upon respondent ownership of the subject property.[10]Respondent filed a Reply/Rejoinder (To Applicants Opposition to Oppositors Motion to Dismiss), [11] asserting that there are no factual or legal basis for the claim of petitioner that the subject property is reclaimed land. Petitioner sought the original registration of its title over the subject property acquired through alleged continuous possession for 30 years under Section 14(1) of the Property Registration Decree, and not through the reclamation of the said property at its own expense under Republic Act No. 1899. The present claim of petitioner that the subject property is reclaimed land should not be allowed for it would improperly change the earlier theory in support of the application for registration. Respondent reiterated that the subject property is foreshore land which cannot be registered; and that Presidential Proclamation No. 1232 is very material to LRC Case No. N-201 because it confirms that areas within the Dumaguete Port Zone, including the subject property, are not alienable and disposable lands of the public domain.On , the RTC issued an Order[12] granting the Motion to Dismiss of respondent based on the following ratiocination:

The Court agrees with [herein respondent] Philippine Ports Authority that the basis of the [herein petitioners] application for original registration of the subject lot is Section 14 of the Presidential Decree No. 1529, otherwise known as the Property Registration Decree. A circumspect scrutiny of said Section readily shows that it refers to alienable and disposable lands of the public domain as proper subjects of registration, provided the applicant has met the other requirements such as open, continuous, exclusive and notorious possession for at least thirty (30) years under a bona fide claim of ownership.It having been shown by [petitioners] own evidence that the lot subject of the application for original registration is a foreshore land, and therefore not registerable (Dizon, et al. vs. Bayona, et al., 98 SCRA 942, 944), the application must be denied.Again as correctly argued by [respondent], [petitioners] reliance on Republic Act 1899 which authorizes all municipalities and chartered cities to undertake and carry out the reclamation by dredging, filling or other means of any foreshore lands bordering them and which confers ownership on them of the lands so reclaimed, is misplaced, as such has never been alleged in the application. It is fundamental that a party cannot prove what it has not alleged in his complaint or application, as in this case.The admission by Engr. Dorado that there is no formal declaration from the executive branch of government or law passed by Congress that the land in question is no longer needed for public use or special industries x x x further militates against the application.

Moreover, the authority granted to municipalities and chartered cities to undertake and carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore lands bordering them is for the purpose of establishing, providing, constructing, maintaining, and repairing proper and adequate docking and harbor facilities as such municipalities and chartered cities may determine in consultation with the Secretary of Finance and the Secretary of Public Works and Communications.By its own evidence, [petitioner] has utilized the subject property allegedly reclaimed by it as Office of the City Engineer and not as docking and harboring facilities.[Petitioner] has failed to show that such reclamation was undertaken by it in consultation with the Secretary of Finance and the Secretary of Public Works and Communications.[13]

The RTC decreed in the end that the instant application for original registration is dismissed for lack of merit.[14]In its Motion for Reconsideration[15] and Supplemental Motion for Reconsideration,[16] petitioner contended that the dismissal of its application was premature and tantamount to a denial of its right to due process. It has yet to present evidence to prove factual matters in support of its application, such as the subject property already being alienable and disposable at the time it was occupied and possessed by petitioner.Petitioner also pointed out that its witness, Engr. Dorado, testified only as to the physical status of the land in question at the time when the cadastral survey of Dumaguete was made sometime in 1916.[17] In fact, Engr. Dorado expressly testified that the subject property was part of the shore or foreshore a long time ago[;][18] and he did not testify at all that the subject property was a foreshore lot at the time petitioner occupied and possessed the same. The physical state of the subject property had already changed since 1916. It is now within the alienable and disposable area as per the Land Classification Map No. 674, Project No. 1-D, BL C-6, certified on July 3, 1927, of the Bureau of Lands, now Land Management Sector of the Department of Environment and Natural Resources[,][19] as verified and certified by the Chief of the Map Projection Section, Land Management Sector, DENR Regional Office in Cebu City, who has yet to take the witness stand before the RTC.Petitioner insisted that the RTC should continue with the hearing of LRC Case No. N-201 and allow petitioner to present evidence that the subject property is reclaimed land. Petitioner sufficiently alleged in its application for registration that it has been in open, continuous, exclusive, and notorious possession of the [subject property] for more than thirty (30) years under a bona

fide claim of ownership.[20] In support of such allegation, petitioner must necessarily prove that

the subject property was previously a swampy area, which had to be filled or reclaimed before the construction of the City Engineers Office building thereon.Respondent based its Opposition (To Applicants Motion for Reconsideration dated September 28, 2000)[21] and Opposition (To Applicants Supplemental Motion for Reconsideration)[22] on technical and substantive grounds.According to respondent, the Motion for Reconsideration of petitioner violated Sections 4 (Hearing of motion), 5 (Notice of hearing), and 6 (Proof of service necessary), Rule 15 of the Rules of Court. Petitioner did not set its Motion for Reconsideration for hearing even when the said Motion could not be considered as non-litigable. The RTC could not hear the motion for reconsideration ex

parte as they are prejudicial to the rights of respondent. Petitioner also failed to comply with Section 11, Rule 13 of the Rules of Court when it did not attach to the Motion for Reconsideration a written explanation why it did not resort to personal service of the said Motion. Thus, respondent averred that the Motion for Reconsideration of petitioner should be treated as a mere scrap of paper with no legal effect. It did not interrupt the reglementary period to appeal and the RTC Order dated , dismissing LRC Case No. N-201, had already attained finality. Respondent also pointed out that the Supplemental Motion for Reconsideration of petitioner suffered from the same fatal defects as the original Motion for Reconsideration.Respondent again posited that the subject property was foreshore land belonging to the State and not subject to private appropriation, unless the same had already been declared by the executive or legislative department of the national government as no longer needed for coast guard service, public use, or special industries, and classified as alienable and disposable. Full- blown trial in LRC Case No. N-201 was no longer necessary as the evidence so far presented by petitioner had already established that the RTC lacked jurisdiction over the subject matter of the case.In its Order[23] dated November 16, 2000, the RTC initially agreed with respondent that the Motion for Reconsideration of petitioner violated Sections 4, 5, and 6, Rule 15 and Section 11, Rule 13 of the Rules of Court. Resultantly, the Motion for Reconsideration of petitioner was considered as not filed and did not toll the running of the period to file an appeal, rendering final and executory the order of dismissal of LRC Case No. N-201.However, after taking into consideration the Supplemental Motion for Reconsideration of petitioner, the RTC issued another Order[24] dated , setting aside its Order dated  in the interest of justice and resolving to have a full-blown proceeding to determine factual issues in LRC Case No. N-201.

It was then the turn of respondent to file with the RTC a Motion for Reconsideration[25] of the Order dated . In an Order[26] dated, the RTC denied the motion of respondent and admitted the following:

A thorough review and perusal of the disputed order dated  and , whereby this Court dismissed [petitioners] petition for registration of Lot No. 1, Dumaguete Cadastre, and later set aside the Order of , shows that there was honest mistake in declaring said lot 1, as a shoreline.Indeed, the adjoining lots are already titled and bounded by a . It is not bounded by a sea. The Court wants to correct this error in its findings on the September 7, 2000 Order, that Lot No. 1 is situated on the shoreline of  . The Court simply committed an oversight on the petitioners evidence that the lot in question is a foreshore land x x x when in fact it is not. And it is for this reason that the court reconsidered and set aside said September 7, 2000 Order, to correct the same while it is true that said September 7, 2000 Order had attained its finality, yet this Court cannot in conscience allow injustice to perpetuate in this case and that hearing on the merits must proceed to determine the legality and truthfulness of its application for registration of title.

Respondent sought recourse from the Court of Appeals by filing a Petition for Certiorari and Prohibition under Rule 65 of the Rules of Court, docketed as CA-G.R. SP No. 64379. Respondent challenged the RTC Orders dated December 7, 2000 and February 20, 2001 for having been issued by the RTC in grave abuse of discretion amounting to lack or excess of jurisdiction. Respondent reiterated that the RTC Order dated , dismissing LRC Case No. N-201 had already attained finality. The defects of the Motion for Reconsideration of petitioner rendered the same as a mere scrap of paper, which did not toll the running of the prescriptive period to appeal the RTC Order dated .The Court of Appeals, in its Decision dated March 4, 2005, found merit in the Petition of respondent and set aside the RTC Orders dated December 7, 2000 and February 20, 2001. The appellate court, in its Resolution dated June 6, 2005, denied the Motion for Reconsideration of petitioner.Hence, petitioner comes before us via the instant Petition for Review with the following assignment of error:

GROUND FOR THE APPEALError of law: The March 4, 2005 decision of the Court of Appeals and its June 6, 2005 Resolution, erred on question of law in setting aside the Orders of the Regional Trial Court, Branch 44, dated December 7, 2000 and February 20, 2001. The said Orders of the trial court were made in order to determine factual issues and to correct its error in its findings on the  Order. Thus, the Court of Appeals decision is contrary to law, justice, equity and existing jurisprudence.[27]

Respondent insists on the strict application of Sections 4, 5, and 6, Rule 15 and Section 11, Rule 13 of the Rules of Court. Violations of the said rules were fatal to the Motion for Reconsideration and

Supplemental Motion for Reconsideration of the petitioner, and as a result, the RTC Order dated , dismissing LRC Case No. N-201, had already become final and executory and, thus, beyond the jurisdiction of the RTC to set aside. Respondent urges us to reject the plea of petitioner for a liberal application of the rules in the absence of a compelling reason to do so.We grant the Petition.The grant of a petition for certiorari under Rule 65 of the Rules of Court requires grave abuse of discretion amounting to lack or excess of jurisdiction.Grave abuse of discretion exists where an act is performed with a capricious or whimsical exercise of judgment equivalent to lack of jurisdiction. The abuse of discretion must be patent and gross as to amount to an evasion of positive duty or to a virtual refusal to perform a duty enjoined by law, or to act at all in contemplation of law, as where the power is exercised in an arbitrary and despotic manner by reason of passion or personal hostility.[28]The Court of Appeals erred in granting the writ of certiorari in favor of respondent. The RTC did not commit grave abuse of discretion when, in its Orders dated December 7, 2000 and February 20, 2001, it set aside the order of dismissal of LRC Case No. N-201 and resolved to have a full-blown proceeding to determine factual issues in said case.Procedural rules were conceived to aid the attainment of justice. If a stringent application of the rules would hinder rather than serve the demands of substantial justice, the former must yield to the latter.[29] In Basco v. Court of Appeals,[30] we allowed a liberal application of technical rules of procedure, pertaining to the requisites of a proper notice of hearing, upon consideration of the importance of the subject matter of the controversy, as illustrated in well-settled cases, to wit:

The liberal construction of the rules on notice of hearing is exemplified in Goldloop Properties, Inc. v. CA:

Admittedly, the filing of respondent-spouses' motion for reconsideration did not stop the running of the period of appeal because of the absence of a notice of hearing required in Secs. 3, 4 and 5, Rule 15, of the Rules of Court. As we have repeatedly held, a motion that does not contain a notice of hearing is a mere scrap of paper; it presents no question which merits the attention of the court. Being a mere scrap of paper, the trial court had no alternative but to disregard it. Such being the case, it was as if no motion for reconsideration was filed and, therefore, the reglementary period within which respondent-spouses should have filed an appeal expired on .But, where a rigid application of that rule will result in a manifest failure or miscarriage of justice, then the rule may be relaxed, especially if a party successfully shows that the alleged defect in the questioned final and executory judgment is not apparent on its face or

from the recitals contained therein. Technicalities may thus be disregarded in order to resolve the case. After all, no party can even claim a vested right in technicalities. Litigations should, as much as possible, be decided on the merits and not on technicalities.Hence, this Court should not easily allow a party to lose title and ownership over a party worth P4,000,000.00 for a measly P650,000.00 without affording him ample opportunity to prove his claim that the transaction entered into was not in fact an absolute sale but one of mortgage. Such grave injustice must not be permitted to prevail on the anvil of technicalities.

Likewise, in Samoso v. CA, the Court ruled:But time and again, the Court has stressed that the rules of procedure are not to be applied in a very strict and technical sense. The rules of procedure are used only to help secure not override substantial justice (National Waterworks & Sewerage System vs. Municipality of Libmanan, 97 SCRA 138 [1980]; Gregorio v. Court of Appeals, 72 SCRA 120 [1976]). The right to appeal should not be lightly disregarded by a stringent application of rules of procedure especially where the appeal is on its face meritorious and the interests of substantial justice would be served by permitting the appeal (Siguenza v. Court of Appeals, 137 SCRA 570 [1985]; Pacific Asia Overseas Shipping Corporation v. National Labor Relations Commission, et al., G.R. No. 76595, May 6, 1998). . . .

In the instant case, it is petitioner's life and liberty that is at stake. The trial court has sentenced him to suffer the penalty of reclusion perpetua and his conviction attained finality on the basis of mere technicality. It is but just, therefore, that petitioner be given the opportunity to defend himself and pursue his appeal. To do otherwise would be tantamount to grave injustice. A relaxation of the procedural rules, considering the particular circumstances herein, is justified.[31] (Emphasis ours.)

In the case at bar, the Motion for Reconsideration and Supplemental Motion for Reconsideration of petitioner, which sought the reversal of RTC Order dated September 7, 2000 dismissing LRC Case No. N-201, cite meritorious grounds that justify a liberal application of procedural rules.The dismissal by the RTC of LRC Case No. N-201 for lack of jurisdiction is patently erroneous.Basic as a hornbook principle is that jurisdiction over the subject matter of a case is conferred by law and determined by the allegations in the complaint which comprise a concise statement of the ultimate facts constituting the plaintiff's cause of action. The nature of an action, as well as which court or body has jurisdiction over it, is determined based on the allegations contained in the complaint of the plaintiff, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein. The averments in the complaint and the character of the relief sought are the ones to be consulted. Once vested by the allegations in the complaint,

jurisdiction also remains vested irrespective of whether or not the plaintiff is entitled to recover upon all or some of the claims asserted therein.[32]As a necessary consequence, the jurisdiction of the court cannot be made to depend upon the defenses set up in the answer or upon the motion to dismiss; for otherwise, the question of jurisdiction would almost entirely depend upon the defendant. What determines the jurisdiction of the court is the nature of the action pleaded as appearing from the allegations in the complaint. The averments therein and the character of the relief sought are the ones to be consulted.[33]Under Act No. 496, otherwise known as the Land Registration Act, as amended by Act No. 2347, jurisdiction over all applications for registration of title to land was conferred upon the Courts of First Instance (CFI) of the respective provinces in which the land sought to be registered was situated. Jurisdiction over land registration cases, as in ordinary actions, is acquired upon the filing in court of the application for registration, and is retained up to the end of the litigation.[34]The land registration laws were updated and codified by the Property Registration Decree, and under Section 17 thereof, jurisdiction over an application for land registration was still vested on the CFI of the province or city where the land was situated, viz:

SEC. 17. What and where to file. The application for land registration shall be filed with the Court of First Instance of the province or city where the land is situated.The applicant shall file together with the application all original muniments of titles or copies thereof and a survey plan of the land approved by the Bureau of Lands.The Clerk of Court shall not accept any application unless it is shown that the applicant has furnished the Director of Lands with a copy of the application and all annexes.

Batas Pambansa Blg. 129, otherwise known as The Judiciary Reorganization Act of 1980, created the RTC[35] in place of the CFI. Presently, jurisdiction over an application for land registration remains with the RTC where the land is situated, except when such jurisdiction is delegated by the Supreme Court to the Metropolitan Trial Court, Municipal Trial Courts, and Municipal Circuit Trial Courts under certain circumstances.[36]It is not disputed that the Application for Original Registration of Title filed by petitioner before the RTC of the City of  conformed to Section 15 of the Property Registration Decree, which prescribes the form and contents of such applications. In its Application, petitioner prayed that its title to the subject property, which it repeatedly alleged to have acquired through continuous and adverse possession and occupation of the said property for more than 30 years or since 1960, be placed

under the land registration laws. The allegations and prayer in the Application of petitioner were sufficient to vest jurisdiction on the RTC over the said Application upon the filing thereof.Respondent sought the dismissal of LRC Case No. N-201 on the ground of lack of jurisdiction, not because of the insufficiency of the allegations and prayer therein, but because the evidence presented by petitioner itself during the trial supposedly showed that the subject property is a foreshore land, which is not alienable and disposable. The RTC granted the Motion to Dismiss of respondent in its Order dated September 7, 2000. The RTC went beyond the allegations and prayer for relief in the Application for Original Registration of petitioner, and already scrutinized and weighed the testimony of Engr. Dorado, the only witness petitioner was able to present.As to whether or not the subject property is indeed foreshore land is a factual issue which the RTC should resolve in the exercise of its jurisdiction, after giving both parties the opportunity to present their respective evidence at a full-blown trial. As we have explained in the Estate of the Late Jesus

S. Yujuico v. Republic[37]:The plain import of Municipality of  is that a land registration court, the RTC at present, has no jurisdiction over the subject matter of the application which respondent Republic claims is public land. This ruling needs elucidation.Firmly entrenched is the principle that jurisdiction over the subject matter is conferred by law. Consequently, the proper CFI (now the RTC) under Section 14 of PD 1529 (Property Registration Decree) has jurisdiction over applications for registration of title to land.x x x xConformably, the Pasig-Rizal CFI, Branch XXII has jurisdiction over the subject matter of the land registration case filed by Fermina Castro, petitioners predecessor-in-interest, since jurisdiction over the subject matter is determined by the allegations of the initiatory pleading the application. Settled is the rule that the authority to decide a case and not the decision rendered therein is what makes up jurisdiction. When there is jurisdiction, the decision of all questions arising in the case is but an exercise of jurisdiction.In our view, it was imprecise to state in Municipality of Antipolo that the  [has] no jurisdiction to entertain the application for registration of public property x x x for such court precisely has the jurisdiction to entertain land registration applications since that is conferred by PD 1529. The applicant in a land registration case usually claims the land subject matter of the application as his/her private property, as in the case of the application of Castro. Thus, the conclusion of the CA that the Pasig-Rizal CFI has no jurisdiction over the subject matter of the application of Castro has no mooring. The land registration court initially has jurisdiction over the land applied for at the time of the filing of the application. After trial, the court, in the exercise of its jurisdiction, can determine whether the title to the land applied for is registerable and can be confirmed. In the event that the subject matter of the application turns out to be inalienable public land, then it has no jurisdiction to order the registration of the land and perforce must dismiss the application. [38] (Emphasis ours.)

It is true that petitioner, as the applicant, has the burden of proving that the subject property is alienable and disposable and its title to the same is capable of registration. However, we stress that the RTC, when it issued its Order dated , had so far heard only the testimony of Engr. Dorado, the first witness for the petitioner. Petitioner was no longer afforded the opportunity to present other witnesses and pieces of evidence in support of its Application. The RTC Order dated  already declaring the subject property as inalienable public land, over which the RTC has no jurisdiction to order registration was evidently premature.The RTC Order dated  has not yet become final and executory as petitioner was able to duly file a Motion for Reconsideration and Supplemental Motion for Reconsideration of the same, which the RTC eventually granted in its Order dated . Admittedly, said motions filed by petitioner did not comply with certain rules of procedure. Ordinarily, such non-compliance would have rendered said motions as mere scraps of paper, considered as not having been filed at all, and unable to toll the reglementary period for an appeal. However, we find that the exceptional circumstances extant in the present case warrant the liberal application of the rules.Also, the Motion for Reconsideration and Supplemental Motion for Reconsideration of the Order dated September 7, 2000 filed by petitioner did not comply with Section 11, Rule 13 of the Rules of Court, for these did not include a written explanation why service or filing thereof was not done personally.Nonetheless, in Maceda v. Encarnacion de Guzman Vda. de Magpantay,[39] citing Solar

Team Entertainment, Inc. v. Ricafort,[40] and Musa v. Amor,[41] we explained the rationale behind said rule and the mandatory nature of the same, vis--vis the exercise of discretion by the court in case of non-compliance therewith:

In Solar Team Entertainment, Inc. v. Ricafort, this Court, passing upon Section 11 of Rule 13 of the Rules of Court, held that a court has the discretion to consider a pleading or paper as not filed if said rule is not complied with.

Personal service and filing are preferred for obvious reasons.  Plainly, such should expedite action or resolution on a pleading, motion or other paper; and conversely, minimize, if not eliminate, delays likely to be incurred if service or filing is done by mail, considering the inefficiency of the postal service.  Likewise, personal service will do away with the practice of some lawyers who, wanting to appear clever, resort to the following less than ethical practices: (1) serving or filing pleadings by mail to catch opposing counsel off-guard, thus leaving the latter with little or no time to prepare, for instance, responsive pleadings or an opposition; or (2) upon receiving notice from the post office that the registered containing the pleading of or other paper from the adverse party may be claimed, unduly procrastinating before claiming the parcel, or, worse, not claiming it at

all, thereby causing undue delay in the disposition of such pleading or other papers.If only to underscore the mandatory nature of this innovation to our set of adjective rules requiring personal service whenever practicable, Section 11 of Rule 13 then gives the court the discretion to consider a pleading or paper as not filed if the other modes of service or filing were not resorted to and no written explanation was made as to why personal service was not done in the first place.  The exercise of discretion must, necessarily consider the practicability of personal service, for Section 11 itself begins with the clause whenever practicable. We thus take this opportunity to clarify that under Section 11, Rule 13 of the 1997 Rules of Civil Procedure, personal service and filing is the general rule, and resort to other modes of service and filing, the exception.  Henceforth, whenever personal service or filing is practicable, in the light of the circumstances of time, place and person, personal service or filing is mandatory.  Only when personal service or filing is not practicable may resort to other modes be had, which must then be accompanied by a written explanation as to why personal service or filing was not practicable to begin with.  In adjudging the plausibility of an explanation, a court shall likewise consider the importance of the subject matter of the case or the issues involved therein, and the prima facie merit of the pleading sought to be expunged for violation of Section 11.

In Musa v. Amor, this Court, on noting the impracticality of personal service, exercised its discretion and liberally applied Section 11 of Rule 13:

As [Section 11, Rule 13 of the Rules of Court] requires, service and filing of pleadings must be done personally whenever practicable.  The court notes that in the present case, personal service would not be practicable.  Considering the distance between the Court of Appeals and Donsol, Sorsogon where the petition was posted, clearly, service by registered mail [sic] would have entailed considerable time, effort and expense.  A written explanation why service was not done personally might have been superfluous.  In any case, as the rule is so worded with the use of may, signifying permissiveness, a violation thereof gives the court discretion whether or not to consider the paper as not filed.  While it is true that procedural rules are necessary to secure an orderly and speedy administration of justice, rigid application of Section 11, Rule 13 may be relaxed in this case in the interest of substantial justice.

In the case at bar, the address of respondents counsel is Lopez, Quezon, while petitioner Sonias counsels is  .  Lopez, Quezon is 83 kilometers away from .  Such distance makes personal service impracticable.  As in Musa v. Amor, a written explanation why service was not done personally might have been superfluous.[42] (Emphases supplied and citations omitted.)

Our ruling in the above-cited cases is relevant to the instant case. Counsel for petitioner holds office in  , Negros Oriental, in the Visayas; while counsel for respondent holds office in , Metro Manila, in . Given the considerable distance between the offices of these two counsels, personal service of pleadings and motions by one upon the other was clearly not practicable and a written explanation as to why personal service was not done would only be superfluous.[43] In addition, we refer once more to the merits of the Motion for Reconsideration and Supplemental Motion for Reconsideration of the RTC Order dated  filed by petitioner, which justify the liberal interpretation of Section 11, Rule 13 of the Rules of Court in this case.Jurisprudence confirms that the requirements laid down in Sections 4, 5, and 6, Rule 15 of the Rules of Court that the notice of hearing shall be directed to the parties concerned, and shall state the time and place for the hearing of the motion, are mandatory. If not religiously complied with, they render the motion pro forma. As such, the motion is a useless piece of paper that will not toll the running of the prescriptive period.[44]Yet, again, there were previous cases with peculiar circumstances that had compelled us to liberally apply the rules on notice of hearing and recognize substantial compliance with the same. Once such case is Philippine National Bank v. Paneda,[45] where we adjudged:

Thus, even if the Motion may be defective for failure to address the notice of hearing of said motion to the parties concerned, the defect was cured by the court's taking cognizance thereof and the fact that the adverse party was otherwise notified of the existence of said pleading. There is substantial compliance with the foregoing rules if a copy of the said motion for reconsideration was furnished to the counsel of herein private respondents.In the present case, records reveal that the notices in the Motion were addressed to the respective counsels of the private respondents and they were duly furnished with copies of the same as shown by the receipts signed by their staff or agents.Consequently, the Court finds that the petitioner substantially complied with the pertinent provisions of the Rules of Court and existing jurisprudence on the requirements of motions and pleadings.[46] (Emphasis supplied.)

It was not refuted that petitioner furnished respondent and respondent actually received copies of the Motion for Reconsideration, as well as the Supplemental Motion for Reconsideration of the RTC Order dated September 7, 2000 filed by petitioner. As a result, respondent was able to file its Oppositions to the said Motions. The RTC, in issuing its Order dated December 7, 2000, was able to consider the arguments presented by both sides. Hence, there was substantial compliance by petitioner with the rules on notice of hearing for its Motion for Reconsideration and Supplemental

Motion for Reconsideration of the RTC Order dated September 7, 2000. Respondent cannot claim that it was deprived of the opportunity to be heard on its opposition to said Motions.In view of the foregoing circumstances, the RTC judiciously, rather than abusively or arbitrarily, exercised its discretion when it subsequently issued the Order dated December 7, 2000, setting aside its Order dated September 7, 2000 and proceeding with the trial in LRC Case No. N-201.WHEREFORE, the instant Petition for Review of petitioner City of Dumaguete is hereby GRANTED. The Decision dated March 4, 2005 and Resolution dated June 6, 2005 of the Court Appeals in CA-G.R. SP No. 64379 are SET ASIDE, and the Orders dated December 7, 2000 and February 20, 2001 of Branch 44 of the Regional Trial Court of the City of Dumaguete in LRC Case No. N-201 are REINSTATED. The said trial court is DIRECTED to proceed with the hearing of LRC Case No. N-201 with dispatch.SO ORDERED.

REPUBLIC OF THE,Petitioner,- versus -CAYETANO L. SERRANO,[1]and HEIRS OF CATALINO M. ALAAN, represented by PAULITA P. ALAAN,Respondents.

G.R. No. 183063Present:

PUNO, C.J., Chairperson,CARPIO MORALES,LEONARDO-DE CASTRO,BERSAMIN, and

VILLARAMA, JR., JJ.Promulgated:February 24, 2010

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CARPIO MORALES, J.:

Respondent Cayetano L. Serrano (Cayetano) filed on September 21, 1988 before the Regional Trial Court (RTC) of Butuan City an application for registration,[2] docketed as LRC Case No. 270, over a 533-square meter parcel of commercial land known as Lot 249 ([on Plan Psu-157485] the lot), located in Poblacion Cabadbaran, Agusan del Norte.Cayetano claimed to have acquired the lot by inheritance   from his deceased parents, Simeon Serrano (Simeon) and Agustina Luz; by virtue of a Deed of Exchange [3]  dated ; and by a private deed of partition and extrajudicial settlement   forged by him and his co-heirs.Invoking the applicability of Presidential Decree No. 1529 or the Property Registration Decree or, in the alternative, the provisions of Chapter VIII, Section 48(b) of Commonwealth Act No. 141,[4] Cayetano also claimed to have been in open, continuous, exclusive and notorious possession of the lot under a claim of ownership before 1917 by himself and through his deceased parentspredecessors-in-interest or for more than 70 years.The Heirs of Catalino Alaan, represented by Paulita Alaan (Paulita),[5] intervened and filed an application for registration,[6] their predecessor-in-interest Catalino Alaan (Catalino) having purchased[7] a 217.45-square meter undivided portion of the lot from Cayetano on February 27, 1989 during the pendency of Cayetanos application for registration.The intervenor-heirs of Catalino, also invoking the provisions of the Property Registration

Decree or, alternatively, of Chapter VIII, Section 48(b) ofCommonwealth Act No. 141, prayed that their application for confirmation of title be considered jointly with that of Cayetanos, and that, thereafter, original certificates of title be issued in both their names.Cayetano raised no objection or opposition to the intervenor-Heirs of Catalinos application for registration.[8]

Cayetanos brother-attorney-in-fact Leonardo Serrano (Leonardo) represented him at the hearings of the application. During the pendency of the case, Cayetano passed away[9] and was substituted by his heirs.At the trial, the following pieces of documentary evidence, inter alia, were presented to support Cayetanos claim of ownership over the lot: original survey plan dated January 3, 1957 and certified by the Department of Environment and Natural Resources (DENR), and Bureau of Lands Director Zoilo Castrillo,[10]technical description of the lot (Psu-157485),[11] Tax Declarations for the years 1924 (in the name of Simeon) and 1948-1997 (in the name of either Simeon [deceased] or Cayetano),[12] official receipts showing real estate tax payments (from 1948-1997),[13] and Surveyors Certificate No. 157485 dated January 1957.[14]As Cayetanos sole witness Leonardo was already physically infirm (hard of hearing and due to old age) at the time trial commenced, his testimony was taken by deposition on written interrogatories.[15]In answer to the interrogatories,[16] Leonardo declared that his family had lived on the lot since pre-war time, his father Simeon having built a house on it following his acquisition from Julian Ydulzura in 1923[17] who had purchased it from Lazaro Raada in 1917;[18] that the construction of a family home in 1923 was reflected in Tax Declaration No. 18,587 in the name of Simeon for the year 1924[19]; that after his fathers death in 1931, his mother and his brother Cayetano continued to possess the lot in the concept of owners and Cayetano in fact built his own house and a bodega thereon; that Cayetano religiously paid real estate taxes from 1951 up to the current year 1997;[20] that the lot was assigned to him and Cayetano as their share of the inheritance by virtue of a private document, Kaligonan, dated June 16, 1951,[21] which was executed by all of the heirs, the contents of which document were subsequently confirmed in a Deed of Extrajudicial Settlement dated August 24, 1988;[22] and that on February 10, 1961, Cayetano exchanged a titled lot in Butuan City for his (Leonardos) half-share in the lot, thereby making Cayetano the sole and exclusive owner thereof.[23]On the other hand, Paulita, wife of Catalino who represented the heirs of Catalino, declared that in February 1989, Cayetano sold to her husband a 217.45-sq. meter portion of the 533-sq. meter lot subject of the present case as embodied in a deed of absolute sale;[24] and that Catalino religiously paid real estate taxes therefor. And she presented an approved Subdivision Plan of Lot 249,[25] Cad-866 indicating therein the respective shares of Cayetano and Catalino based on a survey undertaken by Geodetic Engineer Armando Diola on .[26]

The above-said Subdivision Plan of the lot, duly approved by Celso V. Loriega, Jr., Regional Technical Director of the DENR, Lands Management Services, Region Office XIII for  , carries the following annotation:

Surveyed in accordance with survey authority no. (X-2A) 77 issued by CENRO.This survey is inside the alienable and disposable area as per project no. 5 L.C Map No. 550 certified on July 18, 1925. 249-A,  9090,  249-B,  9091, CAD 866 Cabadbaran Cadastre. (emphasis and underscoring supplied)

Herein   of the , represented by Butuan provincial prosecutor Ambrosio Gallarde, did not present any evidence to oppose the applications.By Decision of ,[27] the RTC granted respondents applications, disposing as follows:

WHEREFORE, conformably with existing laws and jurisprudence, DECISION is hereby rendered:1. Awarding a portion of  249, Psu-15(5)7485 (now known as Lot 249-B, Csd-13-000443-D) containing an area of 316 sq. meters to applicant Cayetano L. Serrano, Sr., represented by his heirs;2. Awarding a portion of  249, Psu-157485 (now known as  249-A, Csd-1-000443-D) containing an area of 217 sq. meters to applicant Catalina M. Alaan, represented by Paulita P. Alaan;IT IS SO ORDERED.

The Office of the Solicitor General, on behalf of herein petitioner, appealed the RTC decision before the Court of Appeals on the grounds that respondents failed to present evidence that the property was alienable or that they possessed the same in the manner and duration required by the provisions of the Property Registration Decree.[28]By Decision of ,[29] the appellate court affirmed the decision of the RTC in this wise:

x x x x. . . [F]rom the aforequoted annotation, the OSGs assertion that there was no competent evidence that would clearly show the subject land was released as alienable and disposable land is unavailing. On the contrary, We HOLD that the said annotation would suffice to comply with the requirement of certification as the same is competent enough to show that the disputed land or the parcels of land   (now Lot Nos. 249-A, Cad-866 and 249-B Cad-866, respectively) applied for by the applicants (Cayetano and Alaan) were   already reclassified as alienable and disposable as early as 18 July 1925, under Project No. 5, L.C. Map No. 550.x x x xRecords show that the subject land was first owned and possessed by Lazaro Raada and the same was sold to Julian Ydulzura per untitled document executed on. On , Ydulzura sold the subject land for one hundred fifty pesos (Php150.00) to Simeon M. Serrano per untitled document, father of Cayetano. Simeon M. Serrano then had the subject land tax declared in his name in 1924 per Declaration of Real Property (Urban) No. 18,587. Upon the demise of Simeon Serrano on , his heirs, including herein applicant Cayetano, partitioned by way of

an Agreement on  the properties of their deceased father. On , the heirs of Simeon M. Serrano executed a Deed of Extrajudicial Settlement confirming further the Agreement executed on  (sic).It is worth noting that from 1955 up to the filing of the   Application for Registration   in     and until 1997, Cayetano religiously paid the real estate taxes of the said subject property. As held in a long line of cases,   tax declarations or realty tax payments of property are not conclusive evidence of ownership, nevertheless, they are good indicia of possession in the concept of owner.   Undoubtedly, applicant Cayetano, through his predecessors-in-interest, having been in open, continuous, exclusive and notorious possession and occupation over the subject property under a bona fide claim of ownership since , or earlier had met the requirements set forth in Section 14(1) of the Property Registration Decree.In fine, We FIND and so HOLD that applicant Cayetano L. Serrano and intervenor-appellee heirs of Catalino M. Alaan, have registrable title to the aforesaid subject lands, Lot 249-B, Csd-13-000443-D and Lot 249-A, Csd-1-000443-D, respectively, as they were able to prove that they are qualified and had complied with the requirements   set forth by the provisions of P.D. No. 1529 which amended Commonwealth Act No. 141, as amended and Presidential Decree No. 1073, which to Our mind merited the allowance of the application for registration of the said property by the trial court.[30] (italics in the original; emphasis and underscoring supplied)

Hence, the present petition which raises the same grounds as those raised by petitioner before the appellate court.The petition fails.The requisites for the filing of an application for registration of title under Section 14(1) of the Property Registration Decree are: that the property is alienable and disposable land of the public domain; that the applicants by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation thereof; and that such possession is under a bona fide claim of ownership since June 12, 1945 or earlier.[31]The Court reiterates the doctrine which more accurately construes Section 14(1) in Republic of the

Philippines v. Court of Appeals and Naguit,[32] viz:. . . the more reasonable interpretation of Section 14(1) is that it merely requires the property sought to be registered as already alienable and disposable at the time the application for registration of title is filed. If the State, at the time the application is made, has not yet deemed it proper to release the property for alienation or disposition, the presumption is that the government is still reserving the right to utilize the property; hence, the need to preserve its ownership in the State irrespective of the length of adverse possession even if in good faith. However, if the property has already been classified as alienable and disposable, as it is in this case, then there is already an intention on the part of the State to abdicate its exclusive prerogative over the property.

This reading aligns conformably with our holding in Republic v. Court of Appeals. Therein, the Court noted that to prove that the land subject of an application for registration is alienable, an applicant must establish the existence of a positive act of the government such as a presidential proclamation or an executive order; an administrative action; investigation reports of Bureau of Lands investigators; and a legislative act or a statute. In that case, the subject land had been certified by the DENR as alienable and disposable in 1980, thus the   Court concluded that the alienable status of the land, compounded by the established fact that therein respondents had occupied the land even before 1927, sufficed to allow the application for registration of the said property. In the case at bar, even the petitioner admits that the subject property was released and certified as within alienable and disposable zone in 1980 by the DENR.[33] (Citations omitted; emphasis and underscoring supplied)

While Cayetano failed to submit any certification which would formally attest to the alienable and disposable character of the land applied for, the Certification by DENR Regional Technical Director Celso V. Loriega, Jr., as annotated on the subdivision plan submitted in evidence by Paulita, constitutes substantial compliance with the legal requirement. It clearly indicates that     249 had been verified as belonging to the alienable and disposable area as early as July 18, 1925 . The DENR certification enjoys the presumption of regularity absent any evidence to the contrary. It bears noting that no opposition was filed or registered by the Land Registration Authority or the DENR to contest respondents applications on the ground that their respective shares of the lot are inalienable. There being no substantive rights which stand to be prejudiced, the benefit of the Certification may thus be equitably extended in favor of respondents.Petitioners contention that respondents failed to adduce sufficient proof of possession and occupation as required under Section 14(1) of the Property Registration Decree does not lie.Undeniably, respondents and/or their predecessors-in-interest must be shown to have exercised acts of dominion over the lot under a bona fide claim of ownership since  or earlier. On what constitutes open, continuous, exclusive and notorious possession and occupation as required by statute,Republic v. Alconaba[34] teaches:

The law speaks of possession and occupation. Since these words are separated by the conjunction and, the clear intention of the law is not to make one synonymous with the other. Possession is broader than occupation because it includes constructive possession. When, therefore, the law adds the word occupation, it seeks to delimit the all encompassing effect of constructive possession. Taken together with the words open, continuous, exclusive and notorious, the word occupation serves to highlight the fact that for an applicant to qualify, his possession must not be a mere fiction. Actual possession of a land consists in the manifestation of acts of dominion

over it of such a nature as a party would naturally exercise over his own property. (emphasis and underscoring supplied)

Leonardo clearly established the character of the possession of Cayetano and his predecessors-in-interest over the lot. Thus he declared that the lot was first owned by Lazaro Raada who sold the same to Julian Ydulzura in 1917 who in turn sold it to his and Cayetanos father Simeon in 1923; that Simeon built a house thereon after its acquisition, which fact is buttressed by entries in Tax Declaration No. 18,587 in the name of Simeon for the year 1924 indicating the existence of a 40-sq. meter residential structure made of nipa and mixed materials, and of coconut trees planted thereon; and that after Simeons demise in 1931, Cayetano built his own house beside the old nipa house before the war, and a bodega after the war, which claims find support in Tax Declarations made in 1948-1958.[35]When pressed during the request for written interrogatories if Leonardo had any other pre-war tax declarations aside from Tax Declaration No. 18,587, he explained that all available records may have been destroyed or lost during the last war but that after the war, the lot was reassessed in his fathers name.[36] The Court finds Leonardos explanation plausible and there is nothing in the records that detracts from its probative value.Finally, the official receipts of realty tax payments[37] religiously made by Cayetano from 1948 to 1997 further serve as credible indicia that Cayetano, after his fathers death in 1931, continued to exercise acts of dominion over the lot.The totality of the evidence thus points to the unbroken chain of acts exercised by Cayetano to demonstrate his occupation and possession of the land in the concept of owner, to the exclusion of all others.WHEREFORE, the petition is DENIED.No costs.

SO ORDERED.CONCHITA CARPIO MORALESAssociate Justice

WE CONCUR:

REPUBLIC OF THE PHILIPPINES,Petitioner,

G.R. No. 180453Present:

- versus - YNARES-SANTIAGO,* J.,CARPIO MORALES,**Acting Chairperson,BRION,DEL CASTILLO, andABAD, JJ.

DANTE C. ABRIL, represented by his Attorney-in-Fact, MANUEL C. BLANCO, JR.

Respondent.

Promulgated:September 25, 2009

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CARPIO MORALES, J.

Dante C. Abril, (respondent) represented by his attorney-in-fact, Manuel C. Blanco, Jr. (Blanco), filed on December 16, 1997 before the Municipal Circuit Trial Court (MCTC) of Ibajay-Nabas, Aklan an Application dated November 18, 1997 for registration of title over a 25,969 square meter parcel of land situated in Barangay Rizal, Nabas, Aklan, identified as Lot No. 9310, Cad. 578-D, Nabas Cadastre (the lot), which he claimed to have acquired by Deed of Sale from the anterior owners and which lot he claimed to be presently in [his] possession . . . through his adjoining owners] whom he named as

N.: Lot 9316 Esperanza Manlabao - - - - - Rizal, Nabas, AklanLot 9317 Jovita Colindon - - - - - - - - Rizal, Nabas, AklanMolada RiverE.: Lot 9308 Ursula Janoya - - - - - - - - - Rizal, Nabas, AklanLot 9309 Gaudioso Baliguat - - - - - - Rizal, Nabas, AklanS.: - - - - - - - - - - - - - - - - - - - - - - - - - - - Molada RiverW.: Lot 9315 Rosario Manlabao - - - - - - Rizal, Nabas, Aklan.[1]

The Application was docketed as LRC Case No. 053 (LRA Record No. 69113).To the Application respondent attached as Annex A the Special Power of Attorney he executed in favor of his attorney-in-fact Blanco, notarized on March 27, 1995.In support of his Application, respondent presented through his attorney-in-fact Blanco, among other documents, a carbon copy of a mimeographed form of a Deed of Sale[2] dated September 21, 1994, with typewritten entries thereon, bearing the signatures of the widow and children of Aurelio Manlabao (Manlabao), alleged possessor of the land; Declaration of Real Property (effective 1999) in petitioners name;[3] Certified Machine Copy of Tax Receipt dated March 16, 1999 in petitioners name;[4] and the technical description and survey plan of the lot.Respondent also presented at the witness stand Blanco, Manlabaos daughter Amalia Tapleras, and Sanrita Francisco who claimed to be an adjacent lot owner.

Blanco testified that petitioner is a resident of San Pedro, Laguna; and that respondent acquired the lot from Manlabao by Deed of Sale dated September 21, 1994 which deed he identified and was marked Exhibits R to R-2 inclusive. He identified too some of the documents in support of petitioners Application.Amalia Tapleras, a mat weaver who was 40 years old at the time she took the witness stand on November 5, 1999, stated that she came to know of the lot when she was seven years old, when it was in the possession of her father Manlabao.Sanrita Francisco, a housekeeper, said to be 62 years old at the time she took the witness stand on February 18, 2000, claimed to be the owner of an adjacent lot (beneath respondents lot), declared that she was five years old when Manlabao began to possess the lot before 1945 or during World War II; and that when Manlabao died (she could not remember when), his wife continued the possession of the lot.The Republic of the Philippines (petitioner), represented by the Office of the Solicitor General, opposed the Application, claiming that the requirements of Section 14 (1) of Presidential Decree No. 1529 or the Property Registration Decree were not complied with.By Order of May 31, 2000, the MCTC granted respondents Application in light of its finding that the requirements of Section 14 of P.D. No. 1529, specifically paragraphs 1, 2 and 4 which read:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws.

x x x x

(4) Those who have acquired ownership of land in any other manner provided for by law.

x x x x

have been satisfactorily met.Thus the trial court disposed:

WHEREFORE, premises considered, judgment is hereby rendered GRANTING the application for registration of the parcel land designated in the approved Survey

Plan (Exhibit C) known as Lot No. 9310, Cad. 758-D, Nabas Cadastre and described in the Technical Description (Exhibit D) with an area of TWENTY FIVE THOUSAND NINE HUNDRED SIXTY NINE (25,969) SQUARE METERS, more or less, situated at Barangay Rizal, Municipality of Nabas, Province of Aklan, Island of Panay, Philippines, under the Property Registration Decree (PD 1529), and title thereto registered and confirmed in the name of DANTE ABRIL, Filipino citizen, married to Helen Castillo, with postal address at 133 Magsaysay Cataquez Village, Landayan, San Pedro, Laguna, Philippines.After this decision shall have become final and executory, an order for the issuance of the Decree of Registration of Title shall issue in favor of the applicant.SO ORDERED. [5]

Petitioner appealed to the Court of Appeals, faulting the MCTC for granting respondents Application despite his failure

I. . . to submit the original tracing cloth plan.

II. . . to prove that the land is alienable and disposable land of the public domain.

III. . . to prove that he and his predecessors-in-interest had been in open, continuous and adverse possession of the land in the concept of owners for more than thirty (30) years in accordance with Section 44, Commonwealth Act No. 141 as amended.[6] (Underscoring supplied)

Brushing aside the first assigned error, the appellate court, held:As long as the identity of the location of the lot can be established by other competent evidence like a duly approved blueprint copy of the plan of Lot 9310, Cad 758-D, Nabas Cadastre and technical description of the said lot, containing and identifying the boundaries, actual area and location of the lot, the presentation of the original tracing cloth plan may be excused. In the case at bench, these competent evidence are obtaining.[7] (Underscoring supplied)

Respecting petitioners second and third assigned errors, the appellate court brushed them aside too, holding that respondent was able to prove by preponderant evidence the alienable character of the lot and his entitlement to and ownership thereof. It quoted with approval the following portions of the MCTC decision crediting respondents documentary and testimonial evidence:

Applicant Dante Abril has the property subject of this application declared in his name for taxation purposes, Exhibit S, and paid taxes thereof from September 21, 1994 up to the present, it has never been disturbed of its possession at anytime by anybody, (tsn. p. 7, 6/18/99, Manuel C. Blanco, Jr.). That the property is planted to coconuts and mango trees which are from 50 to 60 years old, (tsn. p. 7, 6/18/99, Manuel C. Blanco, Jr.). That it was verified by this office to be within Project No. 12, alienable and disposable per LC Map No. 2922 certified as such on October 15, 1980.While it is true that by themselves tax receipts and declarations of ownership for taxation purposes are not incontrovertible evidence of ownership they become strong evidence of ownership acquired by prescription by proof of actual possession of the property (Republic vs. Court of Appeals, 131 SCRA

532). Nobody ever disturbed the application in its possession up to the present. The land was never mortgaged nor encumbered. That the land subject of this application is not needed by the government, Exhibit T.Having been in open, exclusive and undisputed possession for more than 30 years of alienable and disposable public land, applicants possession has attained the character and duration equivalent to an express grant from the government. They shall be conclusively presumed to have performed all the conditions essential to a government grant and shall be entitled to a certificate of title (Republic vs. De Porkan, 151 SCRA 88). Alienable public land held by a possessor personally or thru his predecessor-in-interest, openly, continuously, for 30 years as prescribed by law, becomes private property (Director of Lands vs. Bengson, 151 SCRA 369). Moreover, where a parcel of land, registration to which is applied for has been possessed and cultivated by an applicant and his predecessors-in-interest for a considerable number of years without the government taking any action to dislodge the occupants from their holdings and where the lands has passed from one hand to another by inheritance or by purchase, the burden is upon the government to prove that land is a public domain (Raymundo vs. Diaz, et al., 28 O.G. 37, September 10, 1962).[8] (Citation omitted)

The Court of Appeals thus affirmed the MCTC decision by Decision of October 8, 2007.[9]Hence, the present petition for review on certiorari which echoes the second and third errors petitioner attributed to the MCTC before the appellate court.The pertinent provision of Section 14 of the Property Registration Decree sets forth the requirements for registration of title, viz:

SECTION 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their duly authorized representatives:

(1)       Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of   alienable and disposable lands of the public domain  under a bona fide claim of ownership since June 12, 1945, or earlier.

x x x x (Emphasis and underscoring supplied)

Under said provision of law, three requisites must thus be satisfied: (1) open, exclusive, and notorious possession and occupation of the land since June 12, 1945 or earlier; (2) alienable and disposable character of the land of the public domain, and (3) a bona fide claim of ownership.The record shows that respondent had earlier sought the registration of the same lot. The October 19, 1999 Report of the Land Registration Authority (LRA) submitted to the MCTC reflects so:

x x x x2. LRA Records show that   the same subject lot was previously the subject of registration of title   in Land Reg. Case No. 430, LRA Record No. N-65380 by the   same applicant , however, said application was   denied  for the following reasons as quoted from the decision dated 2 October 1996, to wit:

2. The applicant has not shown that he and his predecessors-in-interest have been in continuous, exclusive and notorious

possession of the subject property. The petition did not state in what manner the applicant or his predecessors-in-interest came into possession of the property, either by possession as owner for more than thirty (30) years or possession since time immemorial. The testimony of Emilia Baldevieso who is only 33 years old to the effect that her father, Aurelio Manlaban [sic], Sr., and before him, her grandfather, Martin Manlabao, were the prior owners of this property, are moreconclusion of law which requires factual support and substantiation. Of course, the Court noted that the applicant tried to cure this deficiency by presenting tax declarations as early as 1953 in the name of Martin Manlabao but tax declarations are not sufficient to prove ownership. x x x3. A letter of the Chief, Surveys Division, Lands Management Services, Region VI, Iloilo City dated August 13, 1999 was received by this Authority, with the information that lot 9310, plan Ap-06-005304 is not   a portion of previously approved isolated survey , and4. This Authority is not in a position to verify whether or not the parcel of land subject of registration is already covered by land patent.[10] (Emphasis and underscoring supplied)

In the same Report, the LRA recommended that should the application be given due course, the DENR, Lands Management Bureau and CENRO be ordered to submit a report on the status of Lot 9310 to determine whether it is already covered by a land patent. The recommendation was not acted upon by the MCTC, however.In vigorously sustaining its opposition to respondents Application, the Republic posits

The testimonies of respondents witnesses only delved on the transfer of the subject property from a certain Aurelio Manlabao [sic] sometime in 1994. The testimony of witnesses Amalia Tapleras only tends to show that the subject property previously belonged to her father, Aurelio Manlabao. There is nothing from her testimony that would show the period when Aurelio Manlabao or the latters heirs had been in possession of said property. Neither is there any evidence of specific acts showing the samenature of possession of Aurelio Manlabao or the latters successors in-interest over the property. Equally important, it was not even clearly shown how the property was transferred from Aurelio Manlabao to his heirs, the vendors of the property to respondent.The testimony of respondents attorney-in-fact Manuel C. Blanco with respect to the alleged actual, peaceful and adverse possession of respondent is merely conclusion of law unsupported by any evidence. His testimony that the property has been declared for taxation purposes in the name of respondent and that respondent has never been disturbed of his possession over the property from the time the property was transferred to him in 1994 does not prove respondents nature of possession over the property.His statement regarding the existence of coconut trees which are about 50 to 60 years old is also unsupported by any independent and competent evidence. Even assuming it is true, its only supports the character of the property as timberland the possession thereof cannot ripen into ownership. It also bears pointing out that Manuel C. Blanco did not even try to point any cultivation or improvement done by respondent on the property.

The testimony of sixty-two year old witness Sanrita Francisco does not suffice to establish that Aurelio Manlabao had adverse possession of the property before 1945 as claimed by respondent. Although she claims that at the age of five, she remembered Aurelio Manlabao in possession of the land, her statement remained vague considering her claim that Aurelio Manlabao held the land for a long time because it was their land. The same witness could not even remember her age during the second World Warwhich was the time Aurelio Manlabao allegedly started possession of the property. She did not even specify the manner and the nature of the improvements introduced in the land. Given her failing recollection, her testimony does not deserve credence.Clearly, the evidence adduced by respondent failed to establish the nature of possession by him and his predecessors-in-interest.There was even no documentary proof on any payment made by the predecessors-in-interest of the real estate tax on the subject property. This failure to pay taxes belies respondents allegation that his predecessors-in-interest had asserted claim or interest over the subject lot.Equally important, there was no proof that Aurelio Manlabao or his heirs had introduced improvements on the property or cultivated the same during the alleged period that they were in possession of the property. x x x[11]

The Court finds for the Republic.The documentary evidence of respondent consists, in the main, of a 1999 Tax Clearance effective 1999 and Tax Receipt dated 1999. Not only do these documents refer to the year 1999, they are not incontrovertible evidence of ownership.As for respondents testimonial evidence, the same does not impress.Respondents attorney-in-fact Blanco identified the Deed of Sale in support of his claim that respondent purchased the lot from the heirs of Manlabao. But Blanco was not even a witness to the forging, as in fact he did not so state, of the Deed of Sale.Amalia Tapleras claimed that she was seven when she became aware that her father Manlabao was in possession of the lot. How Manlabao came into possession of the lot and what was the nature of his possession, Amalia was silent.The 62 year old (in 2000 when she testified) Samarita Francisco claimed to be an adjacent lot owner of the subject lot. She is not, however, among those listed by respondent in his Application as adjacent owner, which was earlier quoted. And as petitioner observes, her testimony that Manlabao had possessed the lot since she was five years old cannot be relied upon, given its vagueness and lack of details determinative of the nature of Manlabaos possession.Even by respondents testimonial evidence which petitioner finds, to reflect mere conclusions of law and to which this Court agrees, respondent failed to prove that he and his predecessors-in-

interest had been in open, continuous, exclusive and notorious possession of the lot under a bona

fide claim of ownership since June 12, 1945 or earlier.In fine, as in his previous try to register the same subject lot, respondent failed to meet the first requisite for the purpose open, exclusive and notorious possession of the land since June 12, 1945 or earlier.This leaves it unnecessary to still dwell on the other requisites for a grant of respondents Application.WHEREFORE, the Court SETS ASIDE the assailed issuances of the Court of Appeals. LRC Case No. 053 (LRA Record No. 69113), the Application for registration of respondent, Dante C. Abril over Lot No. 9310, Cad. 578-D, Nabas Cadastre, filed before the Municipal Circuit Trial Court of Ibajay-Nabas, Aklan, is DISMISSED.

SO ORDERED.

ANICETO BANGIS substituted by his heirs, namely: RODOLFO B. BANGIS, RONNIE B. BANGIS, ROGELIO B. BANGIS, RAQUEL B. QUILLO, ROMULO B. BANGIS, ROSALINA B. PARAN, ROSARIO B. REDDY, REYNALDO B. BANGIS, and REMEDIOS B. LASTRE,Petitioners,

-versus-HEIRS OF SERAFIN AND SALUD ADOLFO, namely: LUZ A. BANNISTER, SERAFIN ADOLFO, JR., and ELEUTERIO ADOLFO rep. by his Heirs, namely: MILAGROS, JOEL, MELCHOR, LEA, MILA, NELSON, JIMMY and MARISSA, all surnamed ADOLFO,Respondents.

G.R. No. 190875Present:PERALTA, J., *Acting Chairperson,ABAD,VILLARAMA, JR.,**MENDOZA, andPERLAS-BERNABE, JJ.Promulgated:

June 13, 2012

x-----------------------------------------------------------------------------------------xD E C I S I O N

PERLAS-BERNABE, J.:

Assailed in this Petition for Review on Certiorari under Rule 45 of the Rules of Court is the March 30, 2009 Decision[1]of the Court of Appeals Mindanao Station (CA) and its December 2, 2009 Resolution[2] in CA-G.R. CV No. 00722-MIN which declared that the transaction between the parties was a mortgage, not a sale, and ordered petitioners to surrender the possession of the disputed lot upon respondents' full payment of their indebtedness.THE ANTECEDENT FACTS

 

 

The spouses Serafin, Sr. and Saludada[3]Adolfo were the original registered owners of a 126,622 square meter lot covered by Original Certificate of Title (OCT) No. P-489 issued on December 15, 1954 (derived from Homestead Patent No. V-34974), located in Valencia, Malaybalay, Bukidnon. This property was mortgaged to the then Rehabilitation Finance Corporation (now Development Bank of the Philippines or DBP) on August 18, 1955,[4]and upon default in the payment of the loan obligation, was foreclosed and ownership was consolidated in DBP's name under Transfer Certificate of Title (TCT) No. T-1152.[5]Serafin Adolfo, Sr., however, repurchased the same and was issued TCT No. 6313[6]on December 1, 1971, a year after his wife died in 1970.Sometime in 1975, Serafin Adolfo, Sr. (Adolfo) allegedly mortgaged the subject property for the sum of P12,500.00 to Aniceto Bangis (Bangis) who immediately took possession of the land.[7]The said transaction was, however, not reduced into writing.[8]

When Adolfo died, his heirs, namely, Luz Adolfo Bannister, Serafin Adolfo, Jr. and Eleuterio Adolfo (Heirs of Adolfo), executed a Deed of Extrajudicial Partition dated December 24, 1997 covering the subject property and TCT No. T-65152[9]was issued to them. On May 26, 1998, the said property was subdivided and separate titles were issued in names of the Heirs of Adolfo, as follows: TCT Nos. T-66562 and T-66563 for Luz Adolfo Banester[10]; TCT Nos. T-66560 and T-66561 in the name of Serafin Adolfo, Jr.; and TCT Nos. T-66564 and T-66565 in favor of Eleuterio Adolfo.[11]

In June 1998, the Heirs of Adolfo expressed their intention to redeem the mortgaged property from Bangis but the latter refused, claiming that the transaction between him and Adolfo was one of sale. During the conciliation meetings in the barangay, Bangis' son, Rudy Bangis, showed them a copy of a deed of sale and a certificate of title to the disputed lot.[12]The parties having failed to amicably settle their differences, a certificate to file action[13]was issued by the barangay. 

THE PROCEEDINGS BEFORE THE RTC

On July 26, 2000, the Heirs of Adolfo filed a complaint[14]before the Regional Trial Court (RTC) for annulment of deed of sale and declaration of the purported contract of sale as antichresis, accounting and redemption of property and damages against Bangis, docketed as Civil Case No. 2993-00. The complaint was amended on September 11, 2001 to include a prayer for the cancellation of TCT No. T-10567 and the tax declarations in the name of Bangis in view of the manifestation[15]filed by Ex-Officio Register of Deeds, Atty. Phoebe Loyola Toribio of the Registry of Deeds, Malaybalay City which states that the said title was of "dubious" origin since there was no deed of conveyance upon which the said transfer certificate of title was based and that its derivative title, TCT No. T-10566, does not exist in the files of the Registry of Deeds.[16] On November 12, 2001, the complaint was again amended to reflect the other certificates of titles issued in the names of the Heirs of Adolfo and the amount of P12,500.00 representing the mortgage debt,[17]followed by another amendment on October 13, 2003 to include the allegation that they have partitioned the subject lot on December 24, 1997 and that no copy of the supposed deed of sale in favor of Bangis can be found in the records of the Provincial Assessor's Office and the Registrar of Deeds. They further prayed, in the alternative, to be allowed to redeem the subject lot under the Homestead Law and that Bangis be ordered to indemnify them: (a) P50,000.00 each as moral damages; (b) 20% of the value of the property as attorney's fees; and (c) P50,000.00 as litigation expenses as well as the costs of suit.[18]

In his Answer with Counterclaim,[19]Bangis claimed to have bought the subject property from Adolfo for which TCT No. T-10567[20]was issued. He also alleged to have been in open and adverse possession of the property since 1972 and that the cause of action of the Heirs of Adolfo has prescribed. On November 11, 2001, Bangis died and was substituted in this suit by his heirs, namely, Rodolfo B. Bangis, Ronie B. Bangis, Rogelio B. Bangis, Raquel B. Quillo, Romulo B. Bangis, Rosalina B. Paran, Rosario B. Reddy, Reynaldo B. Bangis and Remedios B. Lastre (Heirs of Bangis).[21]

During the trial, one of the Heirs of Bangis, Rodolfo Bangis, presented a photocopy of an Extra-Judicial Settlement with Absolute Deed of Sale dated December 30, 1971[22]for the purpose of proving the sale of the subject lot by Adolfo and his heirs in favor of his predecessors-in-interest, Aniceto Bangis and Segundino Cortel, for the sum of P13,000.00. He also presented a Promissory Note[23]of even date purportedly executed by Bangis and Segundino Cortel undertaking to pay the balance of the purchase price in the amount of P1,050.00.[24] Both documents were notarized by Atty. Valentin Murillo who testified to the fact of their execution.[25]Rodolfo Bangis likewise testified that they have been paying the taxes due on the property and had even used the same as collateral for a loan with a bank.[26]

On rebuttal, one of the Heirs of Adolfo, Luz Adolfo Bannister, denied the due execution and genuineness of the foregoing Extra-Judicial Settlement with Absolute Deed of Sale alleging forgery.[27]

On December 29, 2005, the RTC rendered a Decision[28]in favor of the Heirs of Adolfo, the dispositive portion of which reads:

WHEREFORE, the preponderance of evidence being strongly in favor of the plaintiffs and against the defendants, decision is hereby rendered:1. Declaring the contract between the plaintiffs and defendants as a mere mortgage or antichresis and since the defendants have been in the possession of the property in 1975 up to the present time enjoying all its fruits or income, the mortgaged loan of P12,000.00 is deemed fully paid;2. Ordering the defendants to deliver the possession of the property in question and all the improvements thereon to the plaintiffs peacefully;3. Declaring TCT No. 10567 in the name of Aniceto Bangis as NULL AND VOID AB INITIO and directing the Office of the Register of Deeds to cause its cancellation from its record to avoid confusion regarding the ownership thereof; and4. Declaring all the transfer certificates of title issued in favor of the plaintiffs namely, Luz Adolfo-Bannister, Serafin Adolfo, Jr. and Eleuterio Adolfo, as above-mentioned as the ones valid and issued in accordance with PD 1529.SO ORDERED.

Aggrieved, the Heirs of Bangis appealed the foregoing disquisition to the Court of Appeals (CA).

 

THE CA RULING

 

 

In its assailed Decision, the CA affirmed the RTC finding that the contract between the parties was a mortgage, not a sale. It noted that while Bangis was given possession of the subject property, the certificate of title remained in the custody of Adolfo and was never cancelled. The CA also ordered the Heirs of Adolfo to pay the Heirs of Bangis the mortgage debt of P12,500.00[29]with twelve (12%) percent interest reckoned from 1975 until 1998 and to deliver to them the possession of the property upon full payment.[30]It, however, deleted the RTC order directing the Register of Deeds to cancel TCT No. T-10567 in the name of Bangis for being a collateral attack proscribed under PD 1529.[31]

Dissatisfied, the Heirs of Bangis filed a Motion for Reconsideration[32]arguing that the CA erred in disregarding their testimonial and documentary evidence, particularly, the Extra-Judicial Settlement with Absolute Deed of Sale (Exh. 2) which purportedly established the sale in favor of their predecessor-in-interest, Aniceto Bangis. The said motion was, however, denied in the Resolution[33]dated December 2, 2009. 

THE ISSUE BEFORE THE COURT

Hence, the instant petition for review on certiorari based on the lone assignment of error[34]that the transaction between the parties was one of sale and not a mortgage or antichresis. In support, petitioner Heirs of Bangis maintain that the CA erred in not giving probative weight to the Extra-Judicial Settlement with Absolute Deed of Sale[35]which supposedly bolsters their claim that their father, Aniceto Bangis, bought the subject parcel of land from Adolfo. Hence, the corresponding title, TCT No. T-10567, issued as a consequence should be respected.On their part, respondent Heirs of Adolfo averred that no reversible error was committed by the CA in upholding that no sale transpired between the parties' predecessors-in-interest. Moreover, petitioners' TCT No. T-10567 was not offered in evidence and worse, certified as of dubious origin per the Manifestation of the Registrar of Deeds.[36]

THE COURT'S RULING

 

The petition must fail.

At the outset, it should be emphasized that a petition for review on certiorari under Rule 45 of the Rules of Court involves only questions of law and not of facts. A question of law exists when there is doubt as to what the law is on a given set of facts while a question of fact arises when there is doubt as to the truth or falsity of the alleged facts.[37]

The Heirs of Bangis, in insisting that both the RTC and the CA erroneously disregarded the evidence of sale they presented, are effectively asking the Court to re-evaluate factual issues which is proscribed under Rule 45. "Such questions as to whether certain items of evidence should be accorded probative value or weight, or rejected as feeble or spurious, or whether or not the proofs on one side or the other are clear and convincing and adequate to establish a proposition in issue, are without doubt questions of fact."[38]

Nonetheless, the Court perused the records and found substantial evidence supporting the factual findings of the RTC, as affirmed by the CA, that the nature of the transaction between the parties' predecessors-in-interest was a mortgage and not a sale. Thus, the maxim that factual findings of the trial court when affirmed by the CA are final and conclusive on the Court[39]obtains in this case.THERE WAS NEITHER ANANTICHRESIS NOR SALE

 

 

 

For the contract of antichresis to be valid, Article 2134 of the Civil Code requires that "the amount of the principal and of the interest shall be specified in writing; otherwise the contract of antichresis shall be void." In this case, the Heirs of Adolfo were indisputably unable to produce any document in support of their claim that the contract between Adolfo and Bangis was an antichresis, hence, the CA properly held that no such relationship existed between the parties. [40]

On the other hand, the Heirs of Bangis presented an Extra-Judicial Settlement with Absolute Deed of Sale dated December 30, 1971[41]to justify their claimed ownership and possession of the subject land. However, notwithstanding that the subject of inquiry is the very contents of the said document, only its photocopy[42]was presented at the trial without providing sufficient justification for the production of secondary evidence, in violation of the best evidence rule embodied under Section 3 in relation to Section 5 of Rule 130 of the Rules of Court, to wit:

SEC. 3. Original document must be produced; exceptions. - When the subject of inquiry is the contents of a document, no evidence shall be admissible other than the original document itself, except in the following cases:

(1) When the original has been lost or destroyed, or cannot be produced in court, without bad faith on the part of the offeror;(2) When the original is in the custody or under the control of the party against whom the evidence is offered, and the latter fails to produce it after reasonable notice;(3) When the original consists of numerous accounts or other documents which cannot be examined in court without great loss of time and the fact sought to be established from them is only the general result of the whole; and(4) When the original is a public record in the custody of a public officer or is recorded in a public office.

SEC. 5. When original document is unavailable. - When the original document has been lost or destroyed, or cannot be produced in court, the offeror, upon proof of its execution or existence and the cause of its unavailability without bad faith on his part, may prove its contents by a copy, or by a recital of its content in some authentic document, or by the testimony of witnesses in the order stated.

The bare testimony of one of the Heirs of Bangis, Rodolfo Bangis, that the subject document was only handed[43]to him by his father, Aniceto, with the information that the original thereof "could not be found"[44]was insufficient to justify its admissibility. Moreover, the identification made by Notary Public Atty. Valentin Murillo[45]that he notarized such document cannot be given credence as his conclusion was not verified against his own notarial records.[46]Besides, the Heirs of Bangis could have secured a certified copy of the deed of sale from the Assessor's Office[47]that purportedly had its custody in compliance with Section 7, Rule 130[48]of the Rules of Court.In sum, the Heirs of Bangis failed to establish the existence and due execution of the subject deed on which their claim of ownership was founded. Consequently, the RTC and CA were correct in affording no probative value to the said document.[49]

TCT   NO.   T-10567   IN THE   NAME OF

ANICETO BANGIS CANNOT PREVAIL

OVER THE TITLES OF THE HEIRS OF

ADOLFO

Records reveal that TCT No. T-10567 purportedly secured as a consequence of the deed of sale executed by Adolfo and his heirs in favor of Bangis was not offered in evidence. A perusal of its copy, however, shows that it was a transfer from TCT No. T-10566,[50]which title the Heirs of Bangis unfortunately failed to account for, and bore no relation at all to either OCT No. P-489 (the original title of the Spouses Adolfo) or TCT No. T-6313 (issued to Adolfo when he repurchased the same property from DBP). The Manifestation[51]of the Register of Deeds of Malaybalay City

regarding the doubtful origin of TCT No. T-10567 and the regularity of the titles of the Heirs of Adolfo are insightful, thus:

That the verification from the office of the original copy of Transfer Certificate of Title No. T-10567 in the name of Anecito Bangis is existing in the office. Machine copy of the said title is hereto attached as annex "A" but nothing in the title whether annotated or attached, any Deed of Conveyance or other Documents by which said title was issued or transferred in the name of Anecito Bangis.That for the information and guidance of the court attached herewith is a machine copies [sic] Original Certificate of Title No. P-489 in the name of Serafin Adolfo, marked as annex "B" which supposedly the mother title of Transfer Certificate of Title No. T-10567 as to how this title was transferred in the name of Anecito Bangis. Nothing will show which will validly supports [sic] the said transfer, in other words the said title is dubious.This Original Certificate of Title No. P-489 in the name of Serafin Adolfo was mortgage to the Development Bank of the Philippines and then it was consolidated and Transfer Certificate of Title No. T-1152 was issued in the name of Development Bank of the Philippines. From the Development Bank of the Philippines a Deed of Sale was executed by the Development Bank of the Philippines in favor of Serafin Adolfo and Transfer Certificate of Title No. T-6313 marked annex "B-1" was issued in the name of Serafin Adolfo.An Extrajudicial Settlement was now [sic] by the Heirs of Serafin Adolfo and Transfer Certificate of Title Nos. T-65152 annex "B-2", T-66560 annex "B-3", T-66561 annex "B-4", T-66562 annex "B-5", T-66563 annex "B-6", T-66564 annex "B-7", and T-66565 annex "B-8" were issued to the Heirs.The titles issued to the Heirs of Serafin Adolfo were legitimately issued by this office after all its [sic] requirements and supporting documents were submitted and proper annotations were reflected at the back of the title of Serafin Adolfo.Transfer Certificate of Title No. T-10567 as shown on the title was derived from Transfer Certificate of Title No. T-10566 but [sic] title is not existing in this office.

As held in the case of Top Management Programs Corporation v. Luis Fajardo and the Register of

Deeds of Las Pias City:[52]"if two certificates of title purport to include the same land, whether wholly or partly, the better approach is to trace the original certificates from which the certificates of titles were derived."Having, thus, traced the roots of the parties' respective titles supported by the records of the Register of Deeds of Malaybalay City, the courts a quo[53]were correct in upholding the title of the Heirs of Adolfo as against TCT No. T-10567 of Bangis, notwithstanding its earlier issuance on August 18, 1976[54]or long before the Heirs of Adolfo secured their own titles on May 26, 1998. To paraphrase the Court's ruling in Mathay v. Court of Appeals:[55]where two (2) transfer certificates of title have been issued on different dates, the one who holds the earlier title may prevail only in the absence of any anomaly or irregularity in the process of its registration, which circumstance does not obtain in this case.

CANCELLATION OFTCT NO. T-10567

The Court cannot sustain the CA's ruling[56]that TCT No. T-10567 cannot be invalidated because it constitutes as a collateral attack which is contrary to the principle of indefeasibility of titles.It must be noted that Bangis interposed a counterclaim in his Answer seeking to be declared as the true and lawful owner of the disputed property and that his TCT No. T-10567 be declared as superior over the titles of the Heirs of Adolfo.[57]Since a counterclaim is essentially a complaint[58]then, a determination of the validity of TCT No. T-10567 vis-a-vis the titles of the Heirs of Adolfo can be considered as a direct, not collateral, attack on the subject titles.[59]

In Pasio v. Monterroyo, the Court has ruled, thus:It is already settled that a counterclaim is considered an original complaint and as such, the attack on the title in a case originally for recovery of possession cannot be considered as a collateral attack on the title. Development Bank of the Philippines v. Court of Appeals is similar to the case before us insofar as petitioner in that case filed an action for recovery of possession against respondent who, in turn, filed a counterclaim claiming ownership of the land. In that case, the Court ruled:

Nor is there any obstacle to the determination of the validity of TCT No. 10101. It is true that the indefeasibility of torrens title cannot be collaterally attacked. In the instant case, the original complaint is for recovery of possession filed by petitioner against private respondent, not an original action filed by the latter to question the validity of TCT No. 10101 on which petitioner bases its right. To rule on the issue of validity in a case for recovery of possession is tantamount to a collateral attack. However, it should not [b]e overlooked that private respondent filed a counterclaim against petitioner, claiming ownership over the land and seeking damages. Hence, we could rule on the question of the validity of TCT No. 10101 for the counterclaim can be considered a direct attack on the same. A counterclaim is considered a complaint, only this time, it is the original defendant who becomes the plaintiff... It stands on the same footing and is to be tested by the same rules as if it were an independent action. x x x (Citations omitted) [60]

Besides, the prohibition against collateral attack does not apply to spurious or non-existent titles, which are not accorded indefeasibility,[61]as in this case.THE PRESENT ACTION

HAS NOT PRESCRIBED

 

 

The claim of the Heirs of Bangis that since they have been in possession of the subject land since 1972 or for 28 years reckoned from the filing of the complaint in 2000 then, the present action has

prescribed is untenable. It bears to note that while Bangis indeed took possession of the land upon its alleged mortgage, the certificate of title (TCT No. 6313) remained with Adolfo and upon his demise, transferred to his heirs, thereby negating any contemplated transfer of ownership. Settled is the rule that no title in derogation of that of the registered owner can be acquired by prescription or adverse possession.[62]Moreover, even if acquisitive prescription can be appreciated in this case, the Heirs of Bangis' possession being in bad faith is two years shy of the requisite 30-year uninterrupted adverse possession required under Article 1137 of the Civil Code.Consequently, the Heirs of Bangis cannot validly claim the rights of a builder in good faith as provided for under Article 449 in relation to Article 448 of the Civil Code. Thus, the order for them to surrender the possession of the disputed land together with all its improvements was properly made.LIABILITY FOR THE PAYMENTOF INTEREST

 

 

Finally, it is undisputed that the Heirs of Bangis made no judicial or extrajudicial demand on the Heirs of Adolfo to pay the mortgage debt. Instead, it was the latter who signified their intent to pay their father's loan obligation, admittedly in the amount of P12,500.00,[63]which was refused. The mortgage contract therefore continued to subsist despite the lapse of a considerable number of years from the time it was constituted in 1975 because the mortgage debt has not been satisfied.Following the Court's ruling in the iconic case of Eastern Shipping Lines, Inc. v. Court of Appeals,[64]the foregoing liability, which is based on a loan or forbearance of money, shall be subject to legal interest of 12% per annum from the date it was judicially determined by the CA on March 30, 2009 until the finality of this Decision, and not from 1975 (the date of the constitution of the mortgage); nor from 1998 (when an attempt to pay was made) or in 2000 at the time the complaint was filed, because it was the Heirs of Adolfo and not Bangis who filed the instant suit[65]to collect the indebtedness. Thereafter, the judgment award inclusive of interest shall bear interest at 12% per annum until its full satisfaction.[66]

WHEREFORE, premises considered, the instant petition for review on certiorari is DENIED and the assailed Decision dated March 30, 2009 of the Court of Appeals Mindanao Station (CA) and its Resolution dated December 2, 2009 in CA-G.R. CV No. 00722-MIN are AFFIRMED with MODIFICATION: (1) cancelling TCT No. T-10567; and (2) ordering

respondent Heirs of Adolfo to pay petitioner Heirs of Bangis the sum of P12,500.00 with legal interest of 12% per annum reckoned from March 30, 2009 until the finality of this Decision and thereafter, 12% annual interest until its full satisfaction.The rest of the Decision stands.SO ORDERED.

REPUBLIC OF THE PHILIPPINES,Petitioner,- versus -BANTIGUE POINT DEVELOPMENT CORPORATION,Respondent.

G. R. No. 162322Present:CARPIO, J., Chairperson,BRION,PEREZ,SERENO, andREYES, JJ.Promulgated:March 14, 2012

x - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

D E C I S I O N

SERENO, J.:

This Rule 45 Petition requires this Court to address the issue of the proper scope of the delegated jurisdiction of municipal trial courts in land registration cases. Petitioner Republic of the Philippines (Republic) assails the Decision of the Court of Appeals (CA)[1] in CA-G.R. CV No. 70349, which affirmed the Decision of the Municipal Trial Court (MTC) of San Juan, Batangas[2] in LRC Case No. N-98-20, LRA Record No. 68329, granting respondent Bantigue Point Development Corporations (Corporation) application for original registration of a parcel of land. Since only questions of law have been raised, petitioner need not have filed a Motion for Reconsideration of the assailed CA Decision before filing this Petition for Review.

The Facts

On 17 July 1997, respondent Bantigue Point Development Corporation filed with the Regional Trial Court (RTC) of Rosario, Batangas an application for original registration of title over a parcel of land with an assessed value of ₱4,330, ₱1,920 and ₱8,670, or a total assessed value of ₱14,920 for the entire property, more particularly described as Lot 8060 of Cad 453-D, San Juan Cadastre, with an area of more or less 10,732 square meters, located at Barangay Barualte, San Juan, Batangas. [3]

On 18 July 1997, the RTC issued an Order setting the case for initial hearing on 22 October 1997.[4] On 7 August 1997, it issued a second Order setting the initial hearing on 4 November 1997.[5]

Petitioner Republic filed its Opposition to the application for registration on 8 January 1998 while the records were still with the RTC.[6]On 31 March 1998, the RTC Clerk of Court transmitted motu proprio the records of the case to the MTC of San Juan, because the assessed value of the property was allegedly less than ₱100,000.[7]

Thereafter, the MTC entered an Order of General Default[8] and commenced with the reception of evidence.[9] Among the documents presented by respondent in support of its application are Tax Declarations,[10] a Deed of Absolute Sale in its favor,[11] and a Certification from the Department of Environment and Natural Resources (DENR) Community Environment and Natural Resources Office (CENRO) of Batangas City that the lot in question is within the alienable and disposable zone.[12] Thereafter, it awarded the land to respondent Corporation.[13]

Acting on an appeal filed by the Republic,[14] the CA ruled that since the former had actively participated in the proceedings before the lower court, but failed to raise the jurisdictional challenge therein, petitioner is thereby estopped from questioning the jurisdiction of the lower court on appeal.[15] The CA further found that respondent Corporation had sufficiently established the latters registrable title over the subject property after having proven open, continuous, exclusive and notorious possession and occupation of the subject land by itself and its predecessors-in-interest even before the outbreak of World War II.[16]

Dissatisfied with the CAs ruling, petitioner Republic filed this instant Rule 45 Petition and raised the following arguments in support of its appeal:

I.THE REPUBLIC CANNOT BE ESTOPPED FROM QUESTIONING THE JURISDICTION OF THE MUNICIPAL TRIAL COURT OVER THE APPLICATION FOR ORIGINAL REGISTRATION OF LAND TITLE EVEN FOR THE FIRST TIME ON APPEAL

II.THE MUNICIPAL TRIAL COURT FAILED TO ACQUIRE JURISDICTION OVER THE APPLICATION FOR ORIGINAL REGISTRATION OF LAND TITLE.[17]

 

The Courts Ruling

We uphold the jurisdiction of the MTC, but remand the case to the court a quo for further proceedings in order to determine if the property in question forms part of the alienable and disposable land of the public domain.

IThe Republic is not estopped from raising the issue of jurisdiction in this

case.

At the outset, we rule that petitioner Republic is not estopped from questioning the jurisdiction of the lower court, even if the former raised the jurisdictional question only on appeal. The rule is settled that lack of jurisdiction over the subject matter may be raised at any stage of the proceedings.[18] Jurisdiction over the subject matter is conferred only by the Constitution or the law.[19] It cannot be acquired through a waiver or enlarged by the omission of the parties or conferred by the acquiescence of the court.[20] Consequently, questions of jurisdiction may be cognizable even if raised for the first time on appeal.[21]

The ruling of the Court of Appeals that a party may be estopped from raising such [jurisdictional] question if he has actively taken part in the very proceeding which he questions, belatedly objecting to the courts jurisdiction in the event that the judgment or order subsequently rendered is adverse to him[22] is based on the doctrine of estoppel by laches. We are aware of that doctrine first enunciated by this Court in Tijam v. Sibonghanoy.[23] In Tijam, the party-litigant actively participated in the proceedings before the lower court and filed pleadings therein. Only 15 years thereafter, and after receiving an adverse Decision on the merits from the appellate court, did the party-litigant question the lower courts jurisdiction. Considering the unique facts in that case, we held that estoppel by laches had already precluded the party-litigant from raising the question of lack of jurisdiction on appeal. In Figueroa v. People,[24] we cautioned that Tijam must be construed as an exception to the general rule and applied only in the most exceptional cases whose factual milieu is similar to that in the latter case.

The facts are starkly different in this case, making the exceptional rule in Tijam inapplicable. Here, petitioner Republic filed its Opposition to the application for registration when the records were still with the RTC.[25] At that point, petitioner could not have questioned the delegated jurisdiction of the MTC, simply because the case was not yet with that court. When the records were transferred to the MTC, petitioner neither filed pleadings nor requested affirmative relief from that court. On appeal, petitioner immediately raised the jurisdictional question in its Brief.[26] Clearly, the exceptional doctrine of estoppel by laches is inapplicable to the instant appeal.

Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time, to do that which, by exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a reasonable time, warranting the presumption that the party entitled to assert it either has abandoned or declined to assert it.[27] In this case, petitioner Republic has not displayed such unreasonable failure or neglect that would lead us to conclude that it has abandoned or declined to assert its right to question the lower court's jurisdiction.

IIThe Municipal Trial Court properly acquired jurisdiction over the case.

In assailing the jurisdiction of the lower courts, petitioner Republic raised two points of contention: (a) the period for setting the date and hour of the initial hearing; and (b) the value of the land to be registered.First, petitioner argued that the lower court failed to acquire jurisdiction over the application, because the RTC set the date and hour of the initial hearing beyond the 90-day period provided under the Property Registration Decree.[28]

We disagree.The Property Registration Decree provides:

Sec. 23. Notice of initial hearing, publication, etc. - The court shall, within five days from filing of the application, issue an order setting the date and hour of the initial hearing which shall not be earlier than forty-five days nor later than ninety days from the date of the order. x x x.

In this case, the application for original registration was filed on 17 July 1997.[29] On 18 July 1997, or a day after the filing of the application, the RTC immediately issued an Order setting the case for initial hearing on 22 October 1997, which was 96 days from the Order.[30] While the date set by the RTC was beyond the 90-day period provided for in Section 23, this fact did not affect the jurisdiction of the trial court. In Republic v. Manna Properties, Inc.,[31]petitioner Republic therein contended that there was failure to comply with the jurisdictional requirements for original registration, because there were 125 days between the Order setting the date of the initial hearing and the initial hearing itself. We ruled that the lapse of time between the issuance of the Order setting the date of initial hearing and the date of the initial hearing itself was not fatal to the application. Thus, we held:

x x x [A] party to an action has no control over the Administrator or the Clerk of Court acting as a land court; he has no right to meddle unduly with the business of such official in the performance of his duties. A party cannot intervene in matters within the exclusive power of the trial court. No fault is attributable to such party if the trial court errs on matters within its sole power. It is unfair to punish an applicant for an act or omission over which the applicant has neither responsibility nor control, especially if the applicant has complied with all the requirements of the law.[32]

Indeed, it would be the height of injustice to penalize respondent Corporation by dismissing its application for registration on account of events beyond its control.

Moreover, since the RTC issued a second Order on 7 August 1997 setting the initial hearing on 4 November 1997,[33] within the 90-day period provided by law, petitioner Republic argued that the jurisdictional defect was still not cured, as the second Order was issued more than five days from the filing of the application, again contrary to the prescribed period under the Property Registration Decree.[34]

Petitioner is incorrect.

The RTCs failure to issue the Order setting the date and hour of the initial hearing within five days from the filing of the application for registration, as provided in the Property Registration Decree, did not affect the courts its jurisdiction. Observance of the five-day period was merely directory, and failure to issue the Order within that period did not deprive the RTC of its jurisdiction over the case. To rule that compliance with the five-day period is mandatory would make jurisdiction over the subject matter dependent upon the trial court. Jurisdiction over the subject matter is conferred only by the Constitution or the law.[35] It cannot be contingent upon the action or inaction of the court.

This does not mean that courts may disregard the statutory periods with impunity. We cannot assume that the law deliberately meant the provision to become meaningless and to be treated as a dead letter.[36] However, the records of this case do not show such blatant disregard for the law. In fact, the RTC immediately set the case for initial hearing a day after the filing of the application for registration,[37] except that it had to issue a second Order because the initial hearing had been set beyond the 90-day period provided by law.

Second, petitioner contended[38] that since the selling price of the property based on the Deed of Sale annexed to respondents application for original registration was ₱160,000,[39] the MTC did not have jurisdiction over the case. Under Section 34 of the Judiciary Reorganization Act, as amended,[40] the MTCs delegated jurisdiction to try cadastral and land registration cases is limited to lands, the value of which should not exceed ₱100,000.

We are not persuaded.

The delegated jurisdiction of the MTC over cadastral and land registration cases is indeed set forth in the Judiciary Reorganization Act, which provides:

Sec. 34. Delegated Jurisdiction in Cadastral and Land Registration Cases. - Metropolitan Trial Courts, Municipal Trial Courts, and Municipal Circuit Trial Courts may be assigned by the Supreme Court to hear and determine cadastral or land registration cases covering lots where there is no controversy or opposition, or contested lots where the value of which does not exceed One hundred thousand pesos (₱100,000.00), such value to be ascertained by the affidavit of the claimant or by agreement of the respective claimants if there are more than one, or from the corresponding tax declaration of the real property. Their decision in these cases shall be appealable in the same manner as decisions of the Regional Trial Courts. (As amended by R.A. No. 7691) (Emphasis supplied.)

Thus, the MTC has delegated jurisdiction in cadastral and land registration cases in two instances: first, where there is no controversy or opposition; or, second, over contested lots, the value of which does not exceed ₱100,000.The case at bar does not fall under the first instance, because petitioner opposed respondent Corporations application for registration on 8 January 1998.[41]

However, the MTC had jurisdiction under the second instance, because the value of the lot in this case does not exceed ₱100,000.

Contrary to petitioners contention, the value of the land should not be determined with reference to its selling price. Rather, Section 34 of the Judiciary Reorganization Act provides that the value of the property sought to be registered may be ascertained in three ways: first, by the affidavit of the claimant; second, by agreement of the respective claimants, if there are more than one; or, third, from the corresponding tax declaration of the real property.[42]

In this case, the value of the property cannot be determined using the first method, because the records are bereft of any affidavit executed by respondent as to the value of the property. Likewise, valuation cannot be done through the second method, because this method finds application only where there are multiple claimants who agree on and make a joint submission as to the value of the property. Here, only respondent Bantigue Point Development Corporation claims the property.

The value of the property must therefore be ascertained with reference to the corresponding Tax Declarations submitted by respondent Corporation together with its application for registration. From the records, we find that the assessed value of the property is ₱4,330, ₱1,920 and ₱8,670, or a total assessed value of₱14,920 for the entire property.[43] Based on these Tax Declarations, it is evident that the total value of the land in question does not exceed ₱100,000. Clearly, the MTC may exercise its delegated jurisdiction under the Judiciary Reorganization Act, as amended.

IIIA certification from the CENRO is not sufficient proof that the property in

question is alienable and disposable land of the public domain.

Even as we affirm the propriety of the MTCs exercise of its delegated jurisdiction, we find that the lower court erred in granting respondent Corporations application for original registration in the absence of sufficient proof that the property in question was alienable and disposable land of the public domain.

The Regalian doctrine dictates that all lands of the public domain belong to the State.[44] The applicant for land registration has the burden of overcoming the presumption of State ownership by establishing through incontrovertible evidence that the land sought to be registered is alienable or disposable based on a positive act of the government.[45] We held in Republic v. T.A.N.

Properties, Inc. that a CENRO certification is insufficient to prove the alienable and disposable character of the land sought to be registered.[46] The applicant must also show sufficient proof that the DENR Secretary has approved the land classification and released the land in question as alienable and disposable.[47]

Thus, the present rule is that an application for original registration must be accompanied by (1) a CENRO or PENRO[48] Certification; and (2) a copy of the original classification approved by the DENR Secretary and certified as a true copy by the legal custodian of the official records.[49]

Here, respondent Corporation only presented a CENRO certification in support of its application.[50] Clearly, this falls short of the requirements for original registration.

We therefore remand this case to the court a quo for reception of further evidence to prove that the property in question forms part of the alienable and disposable land of the public domain. If respondent Bantigue Point Development Corporation presents a certified true copy of the original classification approved by the DENR Secretary, the application for original registration should be granted. If it fails to present sufficient proof that the land in question is alienable and disposable based on a positive act of the government, the application should be denied.

WHEREFORE, premises considered, the instant Petition for Review is DENIED. Let this case be REMANDED to the Municipal Trial Court of San Juan, Batangas, for reception of evidence to prove that the property sought to be registered is alienable and disposable land of the public domain.

SO ORDERED.

HEIRS OF BIENVENIDO AND ARACELI TANYAG, namely: ARTURO TANYAG, AIDA T. JOCSON AND ZENAIDA T. VELOSO,Petitioners,- versus -

G.R. No. 175763Present:CORONA, C.J.,Chairperson,LEONARDO-DE CASTRO,BERSAMIN,DEL CASTILLO, andVILLARAMA, JR., JJ.

SALOME E. GABRIEL, NESTOR R. GABRIEL, LUZ GABRIEL-ARNEDO married to ARTURO ARNEDO, NORA GABRIEL-CALINGO married to FELIX CALINGO, PILAR M. MENDIOLA, MINERVA GABRIEL-NATIVIDAD marriedto EUSTAQUIO NATIVIDAD, and ERLINDA VELASQUEZ married to HERMINIO VELASQUEZ,Respondents.

Promulgated:April 11, 2012

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -xDECISION

VILLARAMA, JR., J.:

This is a petition for review under Rule 45 which seeks to reverse the Decision[1] dated August 18, 2006 and Resolution[2] dated December 8, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 81224. The CA affirmed the Decision[3] dated November 19, 2003 of the Regional Trial Court of Pasig City, Branch 267 in Civil Case No. 67846 dismissing petitioners complaint for declaration of nullity of Original Certificate of Title (OCT) No. 1035, reconveyance and damages, as well as respondents counterclaims for damages and attorneys fees.

Subject of controversy are two adjacent parcels of land located at Ruhale, Barangay Calzada, Municipality of Taguig (now part of Pasig City, Metro Manila). The first parcel (Lot 1) with an area of 686 square meters was originally declared in the name of Jose Gabriel under Tax Declaration (TD) Nos. 1603 and 6425 issued for the years 1949 and 1966, while the second parcel (Lot 2) consisting of 147 square meters was originally declared in the name of Agueda Dinguinbayan under TD Nos. 6418 and 9676 issued for the years 1966 and 1967.[4] For several years, these lands lined with bamboo plants remained undeveloped and uninhabited.

Petitioners claimed that Lot 1 was owned by Benita Gabriel, sister of Jose Gabriel, as part of her inheritance as declared by her in a 1944 notarized instrument (Affidavit of Sale) whereby she sold the said property to spouses Gabriel Sulit and Cornelia Sanga. Said document states:

DAPAT MALAMAN NG LAHAT NG MAKABABASA

Na, akong Benita Gabriel, balo sa nasirang Calixto Lontoc, Filipina may karapatang gulang naninirahan sa nayon ng Palingon, Tagig, Rizal, x x x sa pamamaguitan nitoy

ISINASAYSAY KO AT PINAGTITIBAY

1.) Na, sarili ko at tunay na pagaari ang isang lagay na lupang kawayanan na sapagkat itoy kabahagui ko sa aking kapatid na [J]ose Gabriel, na itoy mana ko sa aking nasirang ama Mateo Gabriel sa kami lamang dalawa ng aking kapatid na binabanguit ko na Jose Gabriel siyang mga anak at tagapagmana ng aming amang nasirang Mateo Gabriel, maliban sa amin ay wala nang iba, kayat kami ay naghati sa mga ari-arian na na iwan sa amin ng nasirang ama namin na Mateo Gabriel, na ang lupang kawayanang itoy may nakatanim na walong (8) punong kawayan at na sa pook na kung pamagatan ay Ruhale nayon ng Calzada, Tagig, Rizal, at na sa loob ng mga kahanganan at sukat na sumusunod[:]

Na, ang kahangan sa Hilagaan Sapang Ruhale at Vicente Bunye, sa Amihanan Felipe Pagkalinawan, sa Timugan Juan Flores, at sa Habagatan Apolonio Ocol may sukat na 6 areas at 85 centiareas may halagan amillarada na P80.00) Pesos alinsunod sa Tax Blg. 20037, sa pangalan ng aking kapatid na Jose Gabriel. Na, ang lupang itoy hindi natatala sa bisa ng batas Blg. 496 ni sa susog gayon din sa Hipotecaria Espaňola itoy may mga mojon bato ang mga panulok at walang bakod.

2.) Na, alang-alang sa halagang SIYAMNAPO AT ANIM (P96.00) na Pisong salaping guinagamit dito sa Filipinas na bago dumating ang mga sandaling itoy tinaggap ko at ibinayad sa akin ng boong kasiyahang loob ko ng magasawang GABRIEL SULIT AT CORNELIA SANGA, mga Filipinos may mga karapatang gulang mga naninirahan sa nayon ng Calzada, Tagig, Rizal, ngayon ay inilipat ko at ipinagbili ng bilihang tuluyan (Venta real soluta) ang isinasaysay kong lupang kawayanan sa itaas nito ng nasabi halagang SIYAMNAPO AT ANIM (P96.00) na Piso at sa nabanguit na magasawang GABRIEL SULIT AT CORNELIA SANGA, gayon din sa lahat ng mga tagapagmana nila, ngayong mga arao na ito ay ang may hawak at namamahala ng lupang itoy ang mga nakabili sa akin na magasawang GABRIEL SULIT AT CORNELIA SANGA.

3.) Na, ang kasulatang itoy ng bilihan ay nais na itala sa bisa ng batas Blg. 3344.

NA SA KATUNAYAN NG LAHAT NG ITOY ako ay lumagda sa kasulatang ito dito sa Tagig, Rizal, ngayong ika - 28 ng Junio 1944.

(Nilagdaan) BENITA GABRIEL[5]

Lot 1 allegedly came into the possession of Benita Gabriels own daughter, Florencia Gabriel Sulit, when her father-in-law Gabriel Sulit gave it to her as part of inheritance of his son, Eliseo Sulit who

was Florencias husband. Florencia Sulit sold the same lot to Bienvenido S. Tanyag, father of petitioners, as evidenced by a notarized deed of sale dated October 14, 1964.[6] Petitioners then took possession of the property, paid the real estate taxes due on the land and declared the same for tax purposes, as shown by TD No. 11445 issued in 1969 in the name of Bienvenidos wife, Araceli C. Tanyag; TD No. 11445 cancelled TD No. 6425 in the name of Jose Gabriel. TD Nos. 3380 and 00486 also in the name of Araceli Tanyag were issued in the years 1974 and 1979.[7]

As to Lot 2, petitioners averred that it was sold by Agueda Dinguinbayan to Araceli Tanyag under Deed of Sale executed on October 22, 1968. Thereupon, petitioners took possession of said property and declared the same for tax purposes as shown by TD Nos. 11361, 3395, 120-014-00482, 120-00-014-20-002-000, C-014-00180 and D-014-00182 issued for the years 1969, 1974, 1979, 1985, 1991 and 1994.[8] Petitioners claimed to have continuously, publicly, notoriously and adversely occupied both Lots 1 and 2 through their caretaker Juana Quinones[9]; they fenced the premises and introduced improvements on the land.[10]

Sometime in 1979, Jose Gabriel, father of respondents, secured TD No. 120-014-01013 in his name over Lot 1 indicating therein an increased area of 1,763 square meters. Said tax declaration supposedly cancelled TD No. 6425 over Lot 1 and contained the following inscription[11]:

Note: Portions of this Property is Also Declaredin the name of Araceli C. Tanyag underT.D.#120-014-00858 686 sq. m.

Also inscribed on TD No. 120-014-00858[12] (1979) in the name of Araceli Tanyag covering Lot 1 are the following:

This property is also covered by T.D. #120-014-01013in the name of Jose P. Gabriel1-8-80

which notation was carried into the 1985, 1990 and 1991 tax declarations, all in the name of Araceli Tanyag.

On March 20, 2000, petitioners instituted Civil Case No. 67846 alleging that respondents never occupied the whole 686 square meters of Lot 1 and fraudulently caused the inclusion of Lot 2 in TD No. 120-014-01013 such that Lot 1 consisting of 686 square meters originally declared in the name of Jose Gabriel was increased to 1,763 square meters. They contended that the issuance of OCT No. 1035 on October 28, 1998 over the subject land in the name of respondents heirs of Jose Gabriel was null and void from the beginning.[13]

On the other hand, respondents asserted that petitioners have no cause of action against them for they have not established their ownership over the subject property covered by a Torrens title in respondents name. They further argued that OCT No. 1035 had become unassailable one year after its issuance and petitioners failed to establish that it was irregularly or unlawfully procured.[14]

Respondents evidence showed that the subject land was among those properties included in the Extrajudicial Settlement of Estate of Jose P. Gabriel[15]executed on October 5, 1988, covered by TD No. B-014-00643 (1985) in the name of Jose Gabriel. Respondents declared the property in their name but the tax declarations (1989, 1991 and 1994) carried the notation that portions thereof (686 sq. ms.) are also declared in the name of Araceli Tanyag. On October 28, 1998, OCT No. 1035[16] was issued to respondents by the Register of Deeds of Pasig, Metro Manila under Decree No. N-219177 pursuant to the Decision dated September 20, 1996 of the Land Registration Court in LRC Case No. N-11260, covering Lot 1836 MCadm-590-D, Taguig Cadastral Mapping, Plan Ap-04-002253, with an area of 1,560 square meters.

On the other hand, respondents TD Nos. D-014-00839 and D-014-01923 issued in 1993 and 1999 respectively, showed that respondents sold 468 square meters of Lot 1 to Jayson Sta. Barbara.[17] The segregation of said 468 square meters pertaining to Jayson Sta. Barbara was reflected in the approved survey plan of Lot 1836 prepared by respondents surveyor on March 18, 2000.[18]

At the trial, petitioners presented their witness Arturo Tanyag, son of Bienvenido Tanyag and Araceli Tanyag who died on March 30, 1968 and October 30, 1993, respectively. He testified that according to Florencia Sulit, Benita Gabriel-Lontoc and her family were the ones in possession

of Lot 1 since 1944; Benita Gabriel had executed an Affidavit of Sale declaring said property as her inheritance and conveying the same to spouses Gabriel and Cornelia Sulit. He affirmed that they had been in possession of Lot 1 from the time Bienvenido Tanyag bought the land from Florencia Sulit in 1964. Based on the boundaries indicated in the tax declaration, they fenced the property, installed Juana Quinones as their caretaker who also attended to the piggery, put up an artesian well and planted some trees. From 1964 up to 1978, nobody disturbed them in their possession or claimed ownership of the land; four years after acquiring Lot 1, they also purchased the adjacent property (Lot 2) to expand their piggery. Lot 2 was also separately declared for tax purposes after their mother purchased it from Agueda Dinguinbayan. He had personally witnessed the execution of the 1968 deed of sale including its notarization, and was also present during the physical turn over of Lot 2 by the seller. In fact, he was one of the instrumental witnesses to the deed of sale and identified his signature therein. He further described the place as inaccessible at that time as there were no roads yet and they had to traverse muddy tracks to reach their property.[19]

Arturo further testified that the first time they met Jose Gabriel was when the latter borrowed from their mother all the documents pertaining to their property. Jose Gabriel came looking for a piece of property which he claims as his but he had no documents to prove it and so they showed him their documents pertaining to the subject property; out of the goodness of her mothers heart, she lent those documents to her brother Jose Gabriel. During the cadastral survey conducted in 1976, they had both lots surveyed in preparation for their consolidation under one tax declaration. However, they did not succeed in registering the consolidated lots as they discovered that there was another tax declaration covering the same properties and these were applied for titling under the name of Jose Gabriel sometime in 1978 or 1980, which was after the time said Jose Gabriel borrowed the documents from their mother. No notice of the hearings for application of title filed by Jose Gabriel was received by them. They never abandoned the property and their caretaker never left the place except to report to the police when she was being harassed by the respondents. He also recalled that respondents had filed a complaint against them before the barangay but since no agreement was reached after several meetings, they filed the present case.[20]

The next witness for petitioners was Juana Quinones, their caretaker who testified that she had been staying on petitioners property since 1964 or for 35 years already. She had built a nipa

hut and artesian well, raised piggery and poultry and planted some root crops and vegetables on the land. At first there was only one parcel but later the petitioners bought an additional lot; Arturo Tanyag gave her money which she used for the fencing of the property. During all the time she occupied the property there was nobody else claiming it and she also had not received any notice for petitioners concerning the property, nor the conduct of survey on the land. On cross-examination, she admitted that she was living alone and had no Voters ID or any document evidencing that she had been a resident there since 1964. Although she was living alone, she asks for help from other persons in tending her piggery.[21]

Angelita Sulit-delos Santos, cousin of petitioners and also of respondents, testified that she came to know the subject property because according to her paternal grandfather Gabriel Sta. Ana Sulit, her maternal grandmother Benita Gabriel-Lontoc mortgaged the property to him. It was Benita Gabriel Lontoc who took care of her, her siblings and cousins; they lived with her until her death. She identified the signature of Benita Gabriel in the 1944 Affidavit of Sale in favor of Gabriel Sulit. Lot 1 consisting of 600 square meters was vacant property at that time but her family was in possession thereof when it was sold to Gabriel Sulit; it was her father Eliseo Sulit and uncle Hilario Sulit, who were incharge of their property. On cross-examination, she was asked details regarding the supposed mortgage of Lot 1 to Gabriel Sulit but she admitted she does not know anything as she was still very young then.[22]

Respondents first witness was Roberto Gabriel Arnedo, son of Luz Gabriel-Arnedo. He testified that when he was about 5 or 6 years old (1953 or 1954), his grandfather Jose Gabriel used to bring him along to visit the subject property consisting of 1,763 square meters based on the tax declaration and OCT. They had picnics and celebrate his grandfathers birthday there. He recalled accompanying his grandfather in overseeing the planting of gumamela which served as the perimeter fence. Jose Gabriel had not mentioned anything about the claim of petitioners over the same land; Jose Gabriel handed the documents pertaining to the land to his eldest aunt and hence it now belongs to them.[23] On cross-examination, he claimed that during those years he had visited the land together with his grandfather, he did not see Florencia Sulit and her family.[24]

Virginia Villanueva, daughter of Salome Gabriel, testified that they acquired the subject property from their grandfather Jose Gabriel who had a tax declaration in his name. Her mother

furnished them with documents such as tax declarations and the extrajudicial settlement of the estate of Jose Gabriel; they also have an approved survey plan prepared for Salome Gabriel. She does not know the petitioners in this case.[25] On cross-examination, she said that the subject property was inherited by Jose Gabriel from his father Mateo Gabriel; Jose Gabriel was the sole owner of the land while Benita Gabriel has separate properties in Palingon and Langkokak.[26] Though they are not actually occupying the property, they visit the place and she does not know anybody occupying it, except for the portion (486 square meters) which petitioners sold to Sta. Barbara. A nine-door apartment was built on the said portion without their permission.She had talked to both Sta. Barbara and with Arturo Tanyag they had meetings before the barangay; however, petitioners filed the present case in court. She insisted that there is nobody residing in the subject property; there is still the remaining 901 square meters which is owned by their mother. She admitted there were plants on the land but she does not know who actually planted them; it was her grandfather who built a wooden fence and gumamela in the 1960s. As to the hearings on the application for title, she had not attended the same; she does not know whether the petitioners were notified of the said hearings. She also caused the preparation of the survey plan for Salome Gabriel. On the increased area of the property indicated in the later tax declarations, she admitted the discrepancy but said there were barangay roads being built at the time.[27]

Esmeraldo Ramos, Municipal Assessor of Taguig, testified that he was formerly a Land Appraiser in the Office of the Municipal Assessor of Taguig and in the course of his duties had certified one of the tax declarations in the name of respondents (TD No. EL-014-10585). He identified and verified said document and the other tax declarations submitted in court by the respondents. He admitted that on January 10, 1980, they made the entry on TD No. 6425 in the name of Jose Gabriel that the same was cancelled by TD No. 120-014-01013 also in the name of Jose Gabriel who presented a supposed deed of sale in favor of Araceli Tanyag which caused the earlier cancellation of TD No. 6425 in his name. However, upon investigation they found out that the seller Florencia Sulit was not the owner because the declared owner was Jose Gabriel; even the deed of sale recognized that the property was declared in the name of Jose Gabriel. They also discovered from the cadastral survey and tax mapping of Taguig that the property is in the name of Jose Gabriel both in the Bureau of Lands and Municipal Assessors Office. As far as he knows, it was Jose Gabriel who owned the subject property which he usually visited; he recalled that around

the late 70s and 80s, he ordered the fencing of barbed wire and bamboo stalks on the land which is just 3 lots away from his own property. As to the discrepancy in the area of the property as originally declared by Jose Gabriel, he explained that the boundaries in the original tax declaration do not change but after the land is surveyed, the boundaries naturally would be different because the previous owner may have sold his property or the present owner inherits the property from his parents. He admitted that the tax declaration is just for tax purposes and not necessarily proof of ownership or possession of the property it covers.[28]

Respondents last witness was Antonio Argel who testified that he had resided for 52 years on a land near the subject property and as far as he knows it was Jose Gabriel who owns it and planted thereon. On cross-examination, he admitted that Jose Gabriel was not in physical possession of the property. He just assumed that the present occupants of the property were allowed by Jose Gabriel to stay therein because he is the owner. There is an apartment and three small houses existing on the property, and about five families are living there. He confirmed that there is a piggery being maintained by a certain Juana who had been residing there maybe for fifteen years already.[29]

In rebuttal, petitioners presented two witnesses who are owners of properties adjoining that of the subject land. Rodante Domingo testified that it was only now did he learn that the property of Arturo Tanyag is already titled in the name of respondents. He was not aware of the titling proceeding because he never received any notice as adjoining owner. His own property is already titled in his name and he even asked Arturo Tanyag to act as a witness in his application for titling.[30] On the other hand, Dado Dollado testified that he acquired his property in 1979. He likewise affirmed that he did not receive any notice of the proceedings for application for titling filed by respondents and it was only now that he learned from Arturo Tanyag that the subject property was already titled in the names of respondents.[31]

The last rebuttal witness for petitioners was Dominador Dinguinbayan Ergueza, son of Agueda Dinguinbayan. He testified that the subject property was formerly owned by his mother and the present owner is Araceli Tanyag who bought the same from his mother in 1968. He described the boundaries of the property in relation to the adjoining owners at that time; presently, the left portion is already a street (Rujale St.) going towards the sea. He admitted that

his wife, Livina Ergueza was an instrumental witness in the 1968 deed of sale in favor of Araceli Tanyag.[32]

In its decision, the trial court dismissed the complaint as well as the counterclaim, holding that petitioners failed to establish ownership of the subject property and finding the respondents to be the declared owners and legal possessors. It likewise ruled that petitioners were unable to prove by preponderance of evidence that respondents acquired title over the property through fraud and deceit.

Petitioners appealed to the CA which affirmed the trial courts ruling. The CA found that apart from the Affidavit executed by Benita Gabriel in 1944 claiming that she inherited Lot 1 from their father, Mateo Gabriel, there is no evidence that she, not Jose Gabriel, was the true owner thereof. It noted that just four years after Benita Gabriels sale of the subject property to the Sulit spouses, Jose Gabriel declared the same under his name for tax purposes, paying the corresponding taxes. The appellate court stressed that petitioners allegation of bad faith was not proven.

Petitioners motion for reconsideration was likewise denied by the CA. Hence, this petition.

Petitioners assail the CA in not finding that the respondents obtained OCT No. 1035 in their names fraudulently and in bad faith. They also claim to have acquired ownership of the subject lots by virtue of acquisitive prescription.

The issues presented are: (1) whether respondents committed fraud and bad faith in registering the subject lots in their name; and (2) whether petitioners acquired the property through acquisitive prescription.

Registration of a piece of land under the Torrens System does not create or vest title, because it is not a mode of acquiring ownership. A certificate of title is merely an evidence of ownership or title over the particular property described therein.[33] Thus, notwithstanding the indefeasibility of the Torrens title, the registered owner may still be compelled to reconvey the registered property to its true owners. The rationale for the rule is that reconveyance does not set aside or re-subject to review the findings of fact of the Bureau of Lands. In an action for

reconveyance, the decree of registration is respected as incontrovertible. What is sought instead is the transfer of the property or its title which has been wrongfully or erroneously registered in another persons name, to its rightful or legal owner, or to the one with a better right.[34]

An action for annulment of title or reconveyance based on fraud is imprescriptible where the plaintiff is in possession of the property subject of the acts.[35] The totality of the evidence on record established that it was petitioners who are in actual possession of the subject property; respondents merely insinuated at occasional visits to the land. However, for an action for reconveyance based on fraud to prosper, this Court has held that the party seeking reconveyance must prove by clear and convincing evidence his title to the property and the fact of fraud.[36]

The CA correctly observed that the only evidence of Benita Gabriels supposed title was the 1944 Affidavit of Sale whereby Benita Gabriel claimed sole ownership of Lot 1 as her inheritance from their father, Mateo Gabriel. The property until 1949 was still declared in the name Jose Gabriel despite the 1944 sale executed by Benita Gabriel in favor of spouses Gabriel and Cornelia Sulit. As to the alleged fraud perpetrated by Jose Gabriel and respondents in securing OCT No. 1035 in their name, this was clearly not proven as Arturo Tanyag testified merely that Jose Gabriel borrowed their documents pertaining to the property. No document or testimony was presented to show that Jose Gabriel employed deceit or committed fraudulent acts in the proceedings for titling of the property.

However, the CA did not address the issue of acquisitive prescription raised by the petitioners. In their Complaint before the lower court, petitioners alleged

15. Defendants never occupied the whole area of the lot covered by Tax Declaration No. 1603 (686 sq. m.) neither were they able to set foot on the property covered by Tax Declaration No. 6542 [sic] for the reason that those lots had been in actual, open continuous, adverse and notorious possession of the plaintiffs against the whole world for more than thirty years which is equivalent to title.

x x x x[37]

Such character and length of possession of a party over a parcel of land subject of controversy is a factual issue. Settled is the rule that questions of fact are not reviewable in petitions for review on certiorari under Rule 45 of the Rules of Court, as only questions of law shall be raised in such petitions. While this Court is not a trier of facts, if the inference drawn by the appellate court from

the facts is manifestly mistaken, it may, in the interest of justice, review the evidence in order to arrive at the correct factual conclusions based on the record.[38]

In this case, the CA was mistaken in concluding that petitioners have not acquired any right over the subject property simply because they failed to establish Benita Gabriels title over said property. The appellate court ignored petitioners evidence of possession that complies with the legal requirements of acquiring ownership by prescription.

Acquisitive prescription is a mode of acquiring ownership by a possessor through the requisite lapse of time. In order to ripen into ownership, possession must be in the concept of an owner, public, peaceful and uninterrupted.[39] Possession is open when it is patent, visible, apparent, notorious and not clandestine.[40] It is continuous when uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse possessor can show exclusive dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so conspicuous that it is generally known and talked of by the public or the people in the neighborhood. The party who asserts ownership by adverse possession must prove the presence of the essential elements of acquisitive prescription.[41]

On the matter of prescription, the Civil Code provides:

Art. 1117. Acquisitive prescription of dominion and other real rights may be ordinary or extraordinary.

Ordinary acquisitive prescription requires possession of things in good faith and with just title for the time fixed by law.

Art. 1134. Ownership and other real rights over immovable property are acquired by ordinary prescription through possession of ten years.

Art. 1137. Ownership and other real rights over immovables also prescribe through uninterrupted adverse possession thereof for thirty years, without need of title or of good faith. (Emphasis supplied.)

Petitioners adverse possession is reckoned from 1969 with the issuance of TD No. 1145 in the name of Araceli Tanyag, which tax declaration cancelled TD No. 6425 in the name of Jose Gabriel.[42] It is settled that tax receipts and declarations are prima facie proofs of ownership or possession of the property for which such taxes have been paid. Coupled with proof of actual

possession of the property, they may become the basis of a claim for ownership.[43] Petitionerscaretaker, Juana Quinones, has since lived in a nipa hut, planted vegetables and tended a piggery on the land. Aside from paying taxes due on the property, petitioners also exercised other acts of ownership such as selling the 468-square meter portion to Sta. Barbara who had constructed thereon a nine-door apartment building.

It was only in 1979 that respondents began to assert a claim over the property by securing a tax declaration in the name of Jose Gabriel albeit over a bigger area than that originally declared. In 1998, they finally obtained an original certificate of title covering the entire 1,763 square meters which included Lot 1. Did these acts of respondents effectively interrupt the possession of petitioners for purposes of prescription?

We answer in the negative.

In the case of Heirs of Marcelina Azardon-Crisologo v. Raon[44] this Court citing Article 1123 of the Civil Code[45] held that civil interruption takes place with the service of judicial summons to the possessor and not by filing of a mere Notice of Adverse Claim. Thus:

Article 1123 of the Civil Code is categorical. Civil interruption is produced by judicial summons to the possessor. Moreover, even with the presence of judicial summons, Article 1124 sets limitations as to when such summons shall not be deemed to have been issued and shall not give rise to interruption, to wit: 1) if it should be void for lack of legal solemnities; 2) if the plaintiff should desist from the complaint or should allow the proceedings to lapse; or 3) if the possessor should be absolved from the complaint.

Both Article 1123 and Article 1124 of the Civil Code underscore the judicial character of civil interruption. For civil interruption to take place, the possessor must have received judicial summons. None appears in the case at bar. The Notice of Adverse Claim which was filed by petitioners in 1977 is nothing more than a notice of claim which did not effectively interrupt respondents possession. Such a notice could not have produced civil interruption. We agree in the conclusion of the RTC, which was affirmed by the Court of Appeals, that the execution of the Notice of Adverse Claim in 1977 did not toll or interrupt the running of the prescriptive period because there remains, as yet, a necessity for a judicial determination of its judicial validity. What existed was merely a notice. There was no compliance with Article 1123 of the Civil Code. What is striking is that no action was, in fact, filed by petitioners against respondents. As a consequence, no judicial summons was received by respondents. As aptly held by the Court of Appeals in its affirmance of the RTCs ruling, the Notice of Adverse Claim cannot take the place of judicial summons which produces the civil interruption provided for

under the law. In the instant case, petitioners were not able to interrupt respondents adverse possession since 1962. The period of acquisitive prescription from 1962 continued to run in respondents favor despite the Notice of Adverse Claim. (Emphasis supplied.)

From 1969 until the filing of this complaint by the petitioners in March 2000, the latter have been in continuous, public and adverse possession of the subject land for 31 years. Having possessed the property for the period and in the character required by law as sufficient for extraordinary acquisitive prescription, petitioners have indeed acquired ownership over the subject property. Such right cannot be defeated by respondents acts of declaring again the property for tax purposes in 1979 and obtaining a Torrens certificate of title in their name in 1998.

This notwithstanding, we uphold petitioners right as owner only with respect to Lot 1 consisting of 686 square meters. Petitioners failed to substantiate their claim over Lot 2 by virtue of a deed of sale from the original declared owner, Agueda Dinguinbayan. Respondents asserted that the 147 square meters covered by the tax declarations of Dinguinbayan being claimed by petitioners is not the same lot included in OCT No. 1035.

Under Article 434 of the Civil Code, to successfully maintain an action to recover the ownership of a real property, the person who claims a better right to it must prove two (2) things: first, the identity of the land claimed; and second, his title thereto. In regard to the first requisite, in an accion reinvindicatoria, the person who claims that he has a better right to the property must first fix the identity of the land he is claiming by describing the location, area and boundaries thereof.[46]In this case, petitioners failed to identify Lot 2 by providing evidence of the metes and bounds thereof, so that the same may be compared with the technical description contained in OCT No. 1035, which would have shown whether Lot 2 consisting of 147 square meters was erroneously included in respondents title. The testimony of Agueda Dinguinbayans son would not suffice because said witness merely stated the boundary owners as indicated in the 1966 and 1967 tax declarations of his mother. On his part, Arturo Tayag claimed that he had the lots surveyed in the 1970s in preparation for the consolidation of the two parcels.However, no such plan was presented in court.

WHEREFORE, the petition is PARTLY GRANTED. The Decision dated August 18, 2006 of the Court of Appeals in CA-G.R. CV No. 81224 isMODIFIED in that petitioners heirs of Bienvenido and Araceli Tanyag are hereby declared the owners of 686 square meters previously declared under Tax Declaration Nos. 11445, 120-014-00486, 120-014-0085, B-014-00501, E-014-01446, C-014-00893 and D-014-00839 all in the name of Araceli Tanyag, which lot is presently covered by OCT No. 1035 issued by the Register of Deeds of Pasig, Metro Manila in the name of respondents Salome Gabriel, Nestor R. Gabriel, Luz Gabriel-Arnedo, Nora Gabriel-Calingo, Pilar Gabriel-Mendiola, Minerva Gabriel-Natividad and Erlinda Gabriel-Velasquez. Respondents are ORDERED to RECONVEY the said 686-square meter portion to the petitioners.

No pronouncement as to costs.

JEAN TAN, ROSELLER C. ANACINTO, CARLO LOILO ESPINEDA and DAISY ALIADO MANAOIS, represented in this act by their Attorney-in-Fact,MA. WILHELMINA E. TOBIAS,Petitioners,

- versusREPUBLIC OF THE ,Respondent.

G.R. No. 193443Present:CARPIO, J.,Chairperson,BRION,PEREZ,SERENO, andREYES, JJ.Promulgated:April 16, 2012

x----------------------------------------------------------------------------------------x

RESOLUTION

REYES, J.:

This is a petition for review under Rule 45 of the Decision[1] dated July 6, 2009 and Resolution[2] dated August 12, 2010 Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 88995. The facts leading to its filing are as follows:On June 14, 2001, the petitioners filed with the Regional Trial Court (RTC) of Naic, , an application for land registration covering a parcel of land identified as Lot 9972, Cad-459-D of Indang Cadastre, situated in Barangay Bancod, Indang,  and with an area of 6,920 square meters.[3] The petitioners alleged that they acquired the subject property from Gregonio Gatdula pursuant to a Deed of Absolute Sale dated April 25, 1996; and they and their predecessors-in-interest have been in open, continuous and exclusive possession of the subject property in the concept of an owner for more than 30 years.[4]After trial and hearing, the RTC issued a Decision on July 29, 2006, granting the petitioners application, thus:

WHEREFORE, in view of the foregoing, this Court confirming its previous Order of general default, decrees and adjudges Lot No. 9972 consisting of 6,920 square meters, Cad. 459-D, Indang Cadastre and its technical description as herein above-described situated in Brgy. Bancod, Indang, Cavite, pursuant to the provisions of Act 496 as amended by P.D. 1529, as it is hereby decreed and adjudged to be confirmed and registered in the names of Jean Tan, of legal age, Filipino, single, with postal address at Room 54 T. Pinpin St., Binondo, Manila; Roseller C. Anaci[n]to, of legal age, Filipino, single, with postal address at Moncario Villag[e], Ampid-1, San Mateo, Rizal; Carlo Loilo Espineda, of legal age, Filipino, with postal address at Cluster F. Cogeo, Antipolo, Rizal and Daisy Aliado Manaois, of legal age, Filipino and resident of Panghulo Road, Malabon, Metro Manila.Once this decision becomes final, let the corresponding decree of registration be issued by the Administrator, Land Registration Authority.SO ORDERED.[5]

The CA gave due course to the appeal filed by the Republic of the . By way of the assailed Decision, the CA ruled that the petitioners failed to prove that they and their predecessors-in-interest have been in possession of the subject property for the requisite period of 30 years. The CA posit:

We now determine if appellees have the right to register their title on such land despite the fact that their possession commenced only after 12 June 1945. Records show that the appellees possession over the subject property can be reckoned only from 21 June 1983, the date when according to evidence, the subject property became alienable and disposable. From said date up to the filing of the application for registration of title over the subject property on 14 June 2001, only eighteen (18) years had lapsed. Thus, appellees possession of the subject property fell short of the requirement of open, continuous and exclusive possession of at least 30 years.Moreover, there was no adequate evidence which would show that appellees and their predecessors-in-interest exercised acts of dominion over the subject land as to indicate possession in the concept of owner. The testimonies of appellees witnesses regarding actual possession are belied by the absence of evidence on actual use of or improvements on the subject property. Appellees presented only various tax declarations to prove possession. However, except for the Certification, showing payment of tax due on tax declaration for the year 2003, there are no other evidence showing that all the taxes due corresponding to the rest of the tax declarations were in fact paid by appellees or their predecessors-in-interest.In sum, appellees were unable to prove that they or their predecessors-in-interest have been in possession of the subject property for more than 30 years, which possession is characterized as open, continuous, exclusive, and notorious, in the concept of an owner. Appellees failed to discharge their duty of substantiating possession and title to the subject land.WHEREFORE, the appeal is hereby GRANTED and the Decision dated 29 July 2006 of the Regional Trial Court (RTC) of Naic, , Branch 15 is REVERSED andSET ASIDE.SO ORDERED.[6] (citation omitted)

The petitioners moved for reconsideration but this was denied by the CA in its August 12, 2010 Resolution.[7]The petitioners question the conclusion arrived at by the CA, alleging that the evidence they presented prove that they and their predecessors-in-interest have been in possession and occupation of the subject property for more than 30 years. The petitioners claim that the following sufficed to demonstrate that they acquired title over the subject property by prescription:

a.                 the testimony of their attorney-in-fact, Ma. Wilhelmina Tobias, stating that:

                                           i.                        the petitioners have been in actual, notorious and open possession of the subject property since the time they purchased the same in 1996;                                         ii.                        the petitioners have regularly paid the taxes due on the subject property;

                                      iii.                        the petitioners predecessors-in-interest, Victorio Garcia, Felipe Gatdula and Gregonio Gatdula, had been in possession of the subject property for more than 30 years and had religiously paid the taxes due thereon; and                                      iv.                        the subject property is agricultural, alienable and disposable;

b.                 the testimony of the caretaker of the subject property, Margarito Pena, stating that:

                                           i.                        he resides near the subject property;                                         ii.                        he witnessed the execution of the deed of sale that petitioners entered into with Gregonio Gatdula; and                                      iii.                        the petitioners and predecessors-in-interest have been in possession of the subject property for more than 30 years;

c.                  the testimony of Ferdinand Encarnacion, a clerk in the Docket Division of the Land Registration Authority (LRA), stating that:

                                           i.                        no opposition to the petitioners application was filed before the LRA;                                         ii.                        an examiner of the LRA found nothing wrong with the petitioners application; and                                      iii.                        no title covering the subject property was previously issued;

d.                 Tax Declaration Nos. 2935, 2405 and 1823 for the years 1961, 1967 and 1974 in the name of Victorio Garcia;[8]e.                  Tax Declaration Nos. 1534 and 3850 for the years 1980 and 1985 in the name of Felipe Gatdula;[9]f.                   Tax Declaration Nos. 22453-A and 2925 for the years 1991 and 1994 in the name of Gregonio Gatdula;[10]g.                 Tax Declaration Nos. 21956-A, 22096-A, 22097-A and 97-05078 in the name of the petitioners;[11]h.                 Resolution No. 69, Series of 1998, of the Sangguniang Bayan of Indang, , which approved the reclassification of several lots, including the subject property, from agricultural to residential/commercial;[12]i.                   DARCO Conversion Order No. 040210005-(340)-99, Series of 2000, issued by the Department of Agrarian Reform on July 13, 2000, which converted several parcels of land, including the subject property, from agricultural to residential/commercial;[13]j.                   Certification issued by the Department of Environment and Natural Resources (DENR) CALABARZON dated October 29, 2002, stating that the subject area falls within the Alienable and Disposable Land Project No. 13-A of Indang, Cavite per LC Map 3091 certified on June 21, 1983.[14]

Issue

This Court is faced with the lone issue of whether the petitioners have proven themselves qualified to the benefits under the relevant laws on the confirmation of imperfect or incomplete titles.

Our Ruling

Commonwealth Act No. 141, otherwise known as the Public Land Act governs the classification and disposition of lands forming part of the public domain. Section 11 thereof provides that one of the modes of disposing public lands suitable for agricultural purposes is by confirmation of imperfect or incomplete titles. Section 48 thereof enumerates those who are considered to have acquired an imperfect or incomplete title over an alienable and disposable public land.Presidential Decree No. 1529 (P.D. No. 1529), otherwise known as the Property Registration Decree, is a codification of all the laws relative to the registration of property and Section 14 thereof specifies those who are qualified to register their incomplete title over an alienable and disposable public land under the Torrens system. Particularly:

Section 14. Who may apply. The following persons may file in the proper Court of First Instance an application for registration of title to land, whether personally or through their authorized representatives:(1) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive and notorious possession and occupation of alienable and disposable lands of the public domain under a bona fide claim of ownership since June 12, 1945, or earlier.

(2) Those who have acquired ownership of private lands by prescription under the provision of existing laws.

(3) Those who have acquired ownership of private lands or abandoned river beds by right of accession or accretion under the existing laws.(4) Those who have acquired ownership of land in any other manner provided for by law.

As this Court clarified in Heirs of Malabanan v. Republic of the Philippines,[15] and Republic of the

Philippines v. East Silverlane Realty Development Corporation,[16] Section 14(1) covers alienable and disposable lands while Section 14(2) covers private property. Thus, for ones possession and occupation of an alienable and disposable public land to give rise to an imperfect title, the same should have commenced on June 12, 1945 or earlier. On the other, for one to claim that his possession and occupation of private property has ripened to imperfect title, the same should have been for the prescriptive period provided under the Civil Code. Without need for an extensive extrapolation, the private property contemplated in Section 14(2) is patrimonial property as defined in Article 421 in relation to Articles 420 and 422 of the Civil Code.Going further, it was explained in Heirs of Malabanan and East Silverlane, that possession and occupation of an alienable and disposable public land for the periods provided under the Civil Code will not convert it to patrimonial or private property. There must be an express declaration that the property is no longer intended for public service or the development of national wealth. In the

absence thereof, the property remains to be alienable and disposable and may not be acquired by prescription under Section 14(2) of P.D. No. 1529. Thus:

In Heirs of Malabanan, this Court ruled that possession and occupation of an alienable and disposable public land for the periods provided under the Civil Code do not automatically convert said property into private property or release it from the public domain. There must be an express declaration that the property is no longer intended for public service or development of national wealth. Without such express declaration, the property, even if classified as alienable or disposable, remains property of the State, and thus, may not be acquired by prescription.

Nonetheless, Article 422 of the Civil Code states that [p]roperty of public dominion, when no longer intended for public use or for public service, shall form part of the patrimonial property of the State. It is this provision that controls how public dominion property may be converted into patrimonial property susceptible to acquisition by prescription. After all, Article 420 (2) makes clear that those property which belong to the State, without being for public use, and are intended for some public service or for the development of the national wealth are public dominion property. For as long as the property belongs to the State, although already classified as alienable or disposable, it remains property of the public dominion if when it is intended for some public service or for the development of the national wealth. (emphasis supplied)

 Accordingly, there must be an express declaration by the State that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial. Without such express declaration, the property, even if classified as alienable or disposable, remains property of the public dominion, pursuant to Article 420(2), and thus incapable of acquisition by prescription. It is only when such alienable and disposable lands are expressly declared by the State to be no longer intended for public service or for the development of the national wealth that the period of acquisitive prescription can begin to run. Such declaration shall be in the form of a law duly enacted by Congress or a Presidential Proclamation in cases where the President is duly authorized by law.

In other words, for one to invoke the provisions of Section 14(2) and set up acquisitive prescription against the State, it is primordial that the status of the property as patrimonial be first established. Furthermore, the period of possession preceding the classification of the property as patrimonial cannot be considered in determining the completion of the prescriptive period.[17]

The petitioners application is obviously anchored on Section 14(2) of P.D. No. 1529 as they do not claim to have possessed, by themselves or their predecessors-in-interest, the subject property

since June 12, 1945 or earlier. That it was thru prescription that they had acquired an imperfect title over the subject property is the foundation upon which the petitioners rest their application.Unfortunately, this Court finds the evidence presented by the petitioners to be wanting. The petitioners failed to demonstrate that they and their predecessors-in-interest possessed the property in the requisite manner, which this Court explained as follows:

It is concerned with lapse of time in the manner and under conditions laid down by law, namely, that the possession should be in the concept of an owner, public, peaceful, uninterrupted and adverse. Possession is open when it is patent, visible, apparent, notorious and not clandestine. It is continuous when uninterrupted, unbroken and not intermittent or occasional; exclusive when the adverse possessor can show exclusive dominion over the land and an appropriation of it to his own use and benefit; and notorious when it is so conspicuous that it is generally known and talked of by the public or the people in the neighborhood. The party who asserts ownership by adverse possession must prove the presence of the essential elements of acquisitive prescription.[18]

Tax declarations per se do not qualify as competent evidence of actual possession for purposes of prescription. More so, if the payment of the taxes due on the property is episodic, irregular and random such as in this case. Indeed, how can the petitioners claim of possession for the entire prescriptive period be ascribed any ounce of credibility when taxes were paid only on eleven (11) occasions within the 40-year period from 1961 to 2001? In Wee v. Republic of the Philippines,[19] this Court stated that:

It bears stressing that petitioner presented only five tax declarations (for the years 1957, 1961, 1967, 1980 and 1985) for a claimed possession and occupation of more than 45 years (1945-1993). This type of intermittent and sporadic assertion of alleged ownership does not prove open, continuous, exclusive and notorious possession and occupation. In any event, in the absence of other competent evidence, tax declarations do not conclusively establish either possession or declarants right to registration of title.[20] (emphasis supplied and citation omitted)

In East Silverlane, it was emphasized that adverse, continuous, open, public possession in the concept of an owner is a conclusion of law and the burden to prove it by clear, positive and convincing evidence is on the applicant. A claim of ownership will not proper on the basis of tax declarations if unaccompanied by proof of actual possession.[21]While there was an attempt to supplement the tax declaration by testimonial evidence, the same is futile and frivolous. The testimonies of Margarito Pena and Ma. Wilhelmina Tobias do not merit consideration and do not make up for the inherent inadequacy of the eleven (11) tax declarations submitted by the petitioners. Such witnesses did not state what specific acts of ownership or dominion were performed by the petitioners and predecessors-in-interest and simply made that

general assertion that the latter possessed and occupied the subject property for more than thirty (30) years, which, by all means, is a mere conclusion of law. The RTC should have tackled evidence of such nature with a disposition to incredulity, if not with an outright rejection.Furthermore, the petitioners application was filed after only (1) year from the time the subject property may be considered patrimonial. DARCO Conversion Order No. 040210005-(340)-99, Series of 2000, was issued by the DAR only on July 13, 2000, which means that the counting of the thirty (30)-year prescriptive period for purposes of acquiring ownership of a public land under Section 14(2) can only start from such date. Before the property was declared patrimonial by virtue of such conversion order, it cannot be acquired by prescription. This is clear from the pronouncements of this Court in Heirs of Malabanan quoted above and in Republic of the

Philippines v. Rizalvo,[22] which states:On this basis, respondent would have been eligible for application for registration because his claim of ownership and possession over the subject property even exceeds thirty (30) years. However, it is jurisprudentially clear that the thirty (30)-year period of prescription for purposes of acquiring ownership and registration of public land under Section 14 (2) of P.D. No. 1529 only begins from the moment the State expressly declares that the public dominion property is no longer intended for public service or the development of the national wealth or that the property has been converted into patrimonial.[23]

WHEREFORE, premises considered, the instant petition is DENIED for lack of merit. The July 6, 2009 Decision and August 12, 2010 Resolution of the Court of Appeals are AFFIRMED.SO ORDERED.